A share issue where the company gives existing shareholders the first right of refusal of the issue is:
A) an ordinary issue.
B) a preference issue.
C) a rights issue.
D) a bonus issue.

Question

Quizplus · Accepted Answer

A rights issue gives existing shareholders the right (but not the obligation) to purchase additional shares in proportion to their current holdings before they are made available to the general public. This allows existing shareholders to maintain their proportional ownership in the company and avoid dilution of their shares.

A Share Issue Where the Company Gives Existing Shareholders the First