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Question
Answer each of these questions in about fifteen words
What do you understand by private placement?
Solution
Private placement means the direct sale by a company of its securities to a limited number of sophisticated investors.
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RELATED QUESTIONS
Mr. Aditya Gupta was the chairman of ‘Vandan Bank’. The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank announced taking over of ‘Karur Bank’. Aditya Gupta knew that the share price of Vandan Bank would rise on this announcement. Being a part of the bank, he was not allowed to buy shares of the bank. He called one of his rich friends Nimesh and asked him to invest Rs 6 crores in the shares of his bank promising him the capital gain.
As expected, the share prices went up by 40% and the market price of Nimesh’s shares was now Rs 8.4 crores. He had earned a profit of Rs 2.4 crores. He gave Rs 1.2 crore to Mr. Aditya Gupta and kept Rs 1.2 crore with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Aditya Gupta. By quoting the lines from the above para identify and state any two functions that were performed by SEBI in the above case.
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Answer each of these questions in about fifteen words:
State three functions of SEBI rolled into one body.
Answer each of these questions in about fifty words:
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Answer each of these questions in about fifty words:
Explain briefly the three functions of SEBI rolled into one body.
Answer each of these questions in about one hundred and fifty words:
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Depository Participant
Select the correct answer from the options given below and rewrite the statement.
________ regulates the functioning of Stock Exchange in India.
Write a word or a term or a phase which can substitute for the following:
Regulator of securities market in India.
Select the correct option form the bracket.
| Group ‘A’ | Group ‘B’ |
| Regulator of Securities Market | ______________ |
‘MYKAA Limited ‘is dealing in all types of cosmetic products. It is enjoying increased demand for its product during the last few years. For the purpose of expansion the company needs ₹ 100 crores as additional capital. The company decides to raise funds through equity shares. Chirag Kapoor, the finance manager of the company recommended that the shares may be sold through issuing houses or brokers. Identify and explain the method recommended by Mr.Kapoor through which the company can raise additional funds for expansion purposes.
Which of the following is the regulatory function of SEBI?
What are the protective function of SEBI?
______ is an institution or organisation, which holds securities in electronic form, in which trading is done.
Which of the following is not a Protective Function performed by SEBI?
The Securities and Exchange Board of India was established by the Government of India and was given a statutory status in ______.
Of the following sources of funds, ______ are not Borrowed Funds.
Which is the apex statutory body of capital market to which customers can complain to redress their grievances?
______ debt-equity ratio is preferred by the commercial banker over the years as it indicates financial strength of a unit.
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Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of~ 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
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SEBI regulates the prices of the securities listed in the market.
