The correct answer is C. To the existing shareholders.
Right shares are a type of equity share that is offered to existing shareholders in proportion to their existing shareholdings. This means that if a shareholder owns 10% of the company’s shares, they will be offered 10% of the new shares being issued.
Right shares are often used by companies to raise new capital without having to go through the expense and time-consuming process of issuing a new share offer. They can also be used to increase the company’s share capital without diluting the existing shareholders’ ownership.
Right shares are usually offered at a discount to the current market price of the company’s shares. This is because existing shareholders are being given the opportunity to buy new shares at a lower price than they would be able to buy them on the open market.
Right shares can be a good way for existing shareholders to increase their ownership in a company. However, they can also be a risky investment. If the company’s share price falls below the offer price, existing shareholders may end up losing money.
Here is a brief explanation of each option:
A. To the directors of company: This is not correct. Right shares are not offered to the directors of a company. They are offered to the existing shareholders.
B. To the debenture holders: This is not correct. Right shares are not offered to the debenture holders of a company. They are offered to the existing shareholders.
C. To the existing shareholders: This is the correct answer. Right shares are offered to the existing shareholders of a company.
D. To the creditors of company: This is not correct. Right shares are not offered to the creditors of a company. They are offered to the existing shareholders.