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Question
Explain the following term/concept.
Initial Public Offer
Solution
Initial Public Offer refers to the process of offering shares of a company to the public for the first time. A new company or an existing company that had raised its capital earlier from promoters or other investors may offer its shares to the public when it is in need of fresh funds. The first time, the company offers its shares to the public is called an Initial Public offer.
RELATED QUESTIONS
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.
Write a word or a term or a phrase which can substitute the following statement.
Pre-emptive right given to existing Equity shareholders to subscribe to new issue of shares by company.
Answer in one sentence.
To whom is Sweat Equity Shares offered by a company?
Answer in one sentence.
To whom can a company issue Bonus Shares?
Answer in one sentence.
What is the subsequent issue after IPO called as?
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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.
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Employees Stock Option Scheme
Explain the following term/concept.
Sweat Equity shares
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Private placement
Study the following case/situation and express your opinion.
Eva Ltd. Company's capital structure is made up of 1,00,000 Equity shares having face value of ₹ 10 each. The company has offered to the public 40,000 equity shares and out of this, the public has subscribed for 30,000 equity shares. State the following in ₹.
- Authorised capital
- Subscribed capital
- Issued capital
Answer in brief.
State the provisions related to Bonus Shares.
Answer the following question.
Explain the two methods a company can use to make its public offer of shares.
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 |
Give one word or phrase for the following sentence:
Full form of SARS.
Explain the following term/concept:
Bonus shares
