Answers were Sorted based on User's Feedback
Answer / anup
not to the employees.. only existing share holders.. the new
issue is made to the existing share holders is called as
right issue.. generally the issue price is lower than the
market price of the company's stock.
|Is This Answer Correct ?||188 Yes||12 No|
Answer / priyanka
anup is right.when the new issue is made to existing share
holder,it is called right issue.
|Is This Answer Correct ?||64 Yes||9 No|
Answer / chandrashekar
Both Anup and Priyanka are correct. Right isuee is only for
Existing share holders at a discount price than the market
|Is This Answer Correct ?||40 Yes||10 No|
Answer / k.srinivas chowdary
when the company goes for the further issue, then it give
the first preference to the employees and the existing
share holders. it is called right issue.
|Is This Answer Correct ?||97 Yes||69 No|
Answer / ashok rayilla
Issuing shares to existing shareholder
|Is This Answer Correct ?||31 Yes||4 No|
Answer / debarati guha
When doing a Secondary Market Offering of shares to raise
money, a company can opt for doing a rights issue to raise
capital. With the issued rights, existing shareholders have
the privilege to buy a specified number of new shares from
the firm at a specified price within a specified time. A
rights issue is offered to all existing shareholders
individually and may be rejected, accepted in full or (in a
typical rights issue) accepted in part by each shareholder.
Rights are often transferable, allowing the holder to sell
them on the open market.
|Is This Answer Correct ?||25 Yes||4 No|
Answer / abhishek saggar
Company decides to liquidate more stocks, it gives first
preference to the existing shareholders. Such issues is
called as Right Issue
|Is This Answer Correct ?||16 Yes||6 No|
Answer / p.pavan kumar
When the company wants to raise additional money through
the public it gives the first priority to the existing
share holders but not to its employees. Issuing the shares
to employees not come under the right issue. It might
be "ESOP" (Employee Stock Options) or "SWEAT Equity shares".
|Is This Answer Correct ?||7 Yes||1 No|
Answer / simriti uppal
When a company wants to raise capital by issue of shares,It
has to first offer its shares to the existing shareholders
on a ratio basis (1:1 - one right share for each share
held)is called a right issue.
Subscription to right issue does not increase the
shareholder's wealth but letting the right expire will
reduce the shareholder's wealth.
|Is This Answer Correct ?||7 Yes||4 No|
Answer / madhu
If a company wants to raise capital, some times it may go
for a rights issue instead of a public issue. Rights issue
is the process by which the company raises capital from the
existing share holders only. The company fixes a certain
ratio and issues new shares to the existing share holders
based on a pre fixed price.
|Is This Answer Correct ?||5 Yes||2 No|
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