Advertisements
Advertisements
Question
Study the following case/situation and express your opinion.
TRI 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?
Solution
- TRI 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.
- 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.
APPEARS IN
RELATED QUESTIONS
Under _________ method, issue price of shares is based on bidding.
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.
Subsequent issue of shares after an IPO.
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.
Write a word or term or phrase which can substitute the following statement.
It is also called ‘Capitalisation of Profits’.
State whether the following statement is true or false.
Bonus Shares are issued at a discounted price to the Equity shareholders.
Complete the sentence.
In Book Building Method, the final price at which shares are offered to investors is called as ______
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?
Correct the underlined word and rewrite the following sentence.
Under Fixed price issue method, the price of shares is fixed through bidding process
Explain the following term/concept.
Subscribed capital
Initial Public Offer and Further Public Offer
Explain Employee Stock Option Scheme.
Give one word or phrase for the following sentence:
Process of offering shares of the company to the public for the first time.
What is Employee Stock Purchase scheme?
Explain Pricing methods to offer shares to the public.
Explain the following term/concept:
Bonus shares
