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Question : Which of the following statement is correct?
Statement 1:Under Private Placement, the company offers the new shares to its existing shareholders in proportion of shares already held by them.
Statement 2: Money market instruments are less risky.
 

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.


 


Team Careers360 11th Jan, 2024
Answer (1)
Team Careers360 19th Jan, 2024

Correct Answer: Statement 1 is false and statement 2 is true.



Solution : Under private placement the company sell security to the institutional investors or brokers instead of selling them to the general public. Then sell securities to selected giands at a higher price this method is preferred as it is cheaper method of raising funds as compared to a public issue.

Hence, option D is correct.

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