Rights Issue of Shares Quiz

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Questions and Answers

What is a 'rights issue' in the context of the text?

An offer of specified securities by a listed issuer to the shareholders of the issuer company as on the record date (correct)
An offer of specified securities by the government to the shareholders of the issuer company
An offer of specified securities by a listed issuer to any interested investors
An offer of specified securities by a private issuer to the shareholders of the issuer company as on the record date

What is the time limit within which the offer of shares should be made in a 'rights issue'?

Not exceeding 30 days from the date of the offer
Not less than 10 days and not exceeding twenty days from the date of the offer
Not less than 15 days and not exceeding thirty days from the date of the offer (correct)
Not exceeding 15 days from the date of the offer

What is included in the 'rights issue' offer, unless the articles of the company otherwise provide?

A right to extend the time limit for the offer
A right exercisable by the person concerned to renounce the shares offered to him or any of them in favor of any other person (correct)
A right to increase the number of shares offered to the person concerned
A right to deny the shares offered to the person concerned

Who are the recipients of the 'rights issue' offer?

<p>Shareholders of the issuer company as on the record date (B)</p> Signup and view all the answers

What does 'rights issue' deal with, as per the text?

<p>Issue of right shares (C)</p> Signup and view all the answers

Study Notes

Rights Issue

A rights issue is an offer of new shares to existing shareholders in proportion to their existing holdings.
The offer of shares in a rights issue should be made within a specific time limit, which is typically 15-20 days.
The rights issue offer includes the right to renounce the shares in favour of others, unless the articles of the company otherwise provide.
The recipients of the rights issue offer are the existing shareholders of the company.
A rights issue deals with the issue of new shares to existing shareholders to raise additional capital.

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Description

Test your knowledge of Company Account Chapter 1: Rights Issue of Shares under Section 62 with this quiz. Assess your understanding of the conditions and requirements related to rights issues and their implications for listed issuers and shareholders.