Right shares means those shares which are

Issued to directors

Offered to existing share holders

Offered to existing debenture holders

Issued to creditors of the company

Answer is Right!

Answer is Wrong!

The correct answer is B. Right shares are offered to existing shareholders in proportion to their existing shareholdings. This means that if a shareholder owns 100 shares in a company, they will be entitled to buy 100 new shares at a discounted price. This gives existing shareholders the opportunity to maintain their proportionate ownership

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Option A is incorrect because directors are not necessarily shareholders. In fact, it is common for directors to hold a very small number of shares in the companies they serve.

Option C is incorrect because debenture holders are not necessarily shareholders. Debentures are a type of loan that a company can raise from investors. Debenture holders are not entitled to any ownership rights in the company.

Option D is incorrect because creditors are not necessarily shareholders. Creditors are people or companies that have lent money to a company. Creditors are not entitled to any ownership rights in the company.

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