Question

    When a company needs additional capital and keeps the

    voting rights of shareholders proportionally balanced, the company_______?
    A Issues rights shares Correct Answer Incorrect Answer
    B Issues red herring prospectus Correct Answer Incorrect Answer
    C Issues prospectus Correct Answer Incorrect Answer
    D Issues bonus shares Correct Answer Incorrect Answer
    E Issues debentures Correct Answer Incorrect Answer

    Solution

    Section 62. Further issue of share capital- (1) Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered— (a) to persons who, at the date of the offer, are holders of equity shares of the company in proportion, as nearly as circumstances admit, to the paid-up share capital on those shares by sending a letter of offer  

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