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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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