Question : Which of the following statement is correct?
Statement 1: Under offer for sale method firstly the new securities are offered to an intermediary.
Statement 2: Under public issue method, it is used by those companies who have already issued their shares.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Correct Answer:
Statement 1 is true and statement 2 is false.
Solution : Under the offer for sale method, the new securities are first offered to an intermediary, such as an investment bank, which then sells the securities to the public.
Under the public issue method, securities are offered directly to the public for subscription. It can be used by both companies that have already issued shares as well as those that are issuing shares for the first time.
Hence, option C is correct.
Related Questions
Trending Articles/News
