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      Question

      With respect to rights issue of shares, the Right of Renunciation allows existing shareholders to:

      A Existing shareholders have the first opportunity to subscribe Correct Answer Incorrect Answer
      B Transfer or sell their rights entitlement to someone else Correct Answer Incorrect Answer
      C Offer their shares for the rights issue Correct Answer Incorrect Answer
      D To renounce voting rights on the discounted shares for more discount Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      In a Rights Issue, existing shareholders receive the right to subscribe to new shares, usually at a discount. The right of renunciation gives them the option to renounce (give up), transfer, or sell this right to another person, instead of subscribing themselves. This ensures shareholders can benefit financially without purchasing the new shares. 

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