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    Question

    Rights issue is an offer of new additional securities

    by a listed company to its___________
    A Existing shareholders at zero cost basis Correct Answer Incorrect Answer
    B Existing majority shareholders on pre-determined basis Correct Answer Incorrect Answer
    C Existing shareholders on premium price Correct Answer Incorrect Answer
    D Existing shareholders on a discounted price Correct Answer Incorrect Answer
    E Existing shareholders on first-come-first-serve basis Correct Answer Incorrect Answer

    Solution

    Under Rights issue a company first offers additional shares to its existing shareholders at a discounted price.

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