The correct answer is: B. Right Issue
A right issue is a type of equity offering in which existing shareholders are given the opportunity to purchase additional shares in a company. The shares are offered on a pro rata basis, meaning that each shareholder is entitled to purchase a number of new shares that is proportional to their existing shareholding.
Right issues are often used by companies to raise additional capital without having to go through the more expensive and time-consuming process of a public offering. They can also be used to increase the company’s share capital or to dilute the ownership of existing shareholders.
Right issues are typically announced by the company’s board of directors and are made available to all existing shareholders. Shareholders who do not wish to purchase additional shares can usually sell their rights to other investors.
Right issues can be a good way for companies to raise capital without having to give up control of the company. However, they can also be dilutive to existing shareholders, so it is important to carefully consider the terms of any right issue before deciding whether to participate.
Here is a brief explanation of each option:
- A public issue is a type of equity offering that is made available to the general public. Public issues are typically used by companies to raise large amounts of capital.
- A private placement is a type of equity offering that is made to a limited number of investors, such as institutional investors or accredited investors. Private placements are typically used by companies to raise smaller amounts of capital or to avoid the regulatory requirements associated with a public offering.
- A bought-out-deal is a type of merger or acquisition in which the acquiring company purchases all of the outstanding shares of the target company. Bought-out-deals are typically used by companies to acquire a controlling interest in another company.