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प्रश्न
Sai Ltd. Company is newly incorporated public company and wants to raise capital by selling equity shares to the public. The Board of Directors are considering various options for this. Advise the Board on the following matters:
- What should the company offer – IPO or FPO?
- Can the company offer Bonus shares to raise its capital?
- Can the company enter into Underwriting Agreement?
उत्तर
- Sai Company Ltd. is a newly incorporated company and is issuing shares to the public for the first time. Hence, the company should offer Initial Public Offer (IPO).
- Bonus shares are fully paid shares issued free of cost to the existing equity shareholders in proportion to their shareholdings. So, the company cannot raise capital by offering bonus shares.
- The Company can enter into an agreement with underwriters by paying them a commission. The underwriters assure the company to take up the unsold shares (securities) so that the company is able to raise its minimum subscription.
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संबंधित प्रश्न
Select the correct answer from the options given below and rewrite the statement.
______ means shares are offered to the public.
Under _________ method, issue price of shares is based on bidding.
In ________, shares of a company are offered to the public for the first time.
Select the correct answer from the options given below and rewrite the statement.
______ are offered to permanent employees, Directors and Officers of a company.
Select the correct answer from the options given below and rewrite the statement.
Under ______, a company offers its securities to a select group of persons not exceeding 200.
State whether the following statement is true or false.
Floor price is the highest bid price under Book Building method.
Answer in one sentence.
Name the method under which the issue price of shares is fixed through a bidding process.
Answer in one sentence.
Name the capital which is mentioned in the capital clause of Memorandum of Association.
Correct the underlined word and rewrite the following sentence.
Bonus shares are offered to existing employees of a company.
Explain the following term/concept.
Minimum subscription
Explain the following term/concept.
Initial Public Offer
Explain the following term/concept.
Further Public Offer
Explain the following term/concept.
Private placement
Distinguish between the following.
Fixed Price Issues and Book Building
Answer in brief.
State the provisions related to Bonus Shares.
Explain Employee Stock Option Scheme.
Match the pairs.
| Group A | Group B |
| a) Bond holders | 1) Deals with acquisition and use of assets |
| b) IPO | 2) Declared in Annual General Meeting |
| c) Corporate finance | 3) Any issue after first-time public offer |
| d) Final dividend | 4) Deals with acquisition and use of capital |
| e) Preference shares | 5) First-time public offer |
| 6) Fixed rate of dividend | |
| 7) Owners | |
| 8) Fluctuating rate of dividend | |
| 9) Creditors | |
| 10) Declared in board meeting |
Explain the following term/concept.
Employee Stock Purchase Scheme
Explain provisions that the company must fulfil.
