In the case of a share issue being oversubscribed,the common approaches include:
A) Issue additional shares to meet the excess demand.
B) Allocate the shares on a pro rata basis.
C) Increase the issue price of the shares.
D) Issue additional shares to meet the excess demand and increase the issue price of the shares.

Question

Quizplus · Accepted Answer

Allocating the shares on a pro rata basis is the fairest option for all investors, as it ensures that everyone receives a proportional portion of the available shares based on their original request. This also allows the company to avoid the potential negative consequences of dilution that may result from issuing additional shares or raising the issue price.

In the Case of a Share Issue Being Oversubscribed,the Common