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WAEC Commerce 2020 Question 28

Question 28

Stock Exchange

The issue of shares which allows existing shareholders to buy shares at a preferential price is

  1. A.bonus issue.
  2. B.offer for sale.
  3. C.public offer.
  4. D.rights issue.
Show the answer and explanation

Answer: D (rights issue.)

Explanation

A rights issue offers existing shareholders new shares at a price below the market price; bonus shares are given free.