Question

Sometimes company sells its securities to a limited number of sophisticated investors. Identify the method of flotation of new issue discussed above.

• A. Offer to employees
• B. Private placement
• C. Rights issue
• D. Public issue

Hint:

Private placement is typically used by companies to raise capital from specific investors, rather than through a public offering.

Answer 1

The Correct Option is B

Private placement refers to the sale of securities to a limited number of sophisticated investors, without offering them to the general public. This method involves a more selective process for the company to raise capital.