A Disadvantage of a Private Placement as a Source of Additional

question 53

Multiple Choice

A disadvantage of a private placement as a source of additional equity is:

• A)it is slow relative to a rights issue
• B)it dilutes the proportionate claims of existing shareholders
• C)the price per share is usually less than the subscription price in a rights issue
• D)the placement can be made to an investor who supports the current management
• E)tt is more expensive than a rights issue.

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Definitions:

Hobby

An activity done regularly in one's leisure time for pleasure, which can involve collecting, making, or engaging in a particular interest.

Retirement

The phase of life where one exits the workforce permanently, often due to age or health, leading to changes in lifestyle and income.

Financial Plan

A comprehensive evaluation of an individual's current and future financial state by using known variables to predict future income, asset values, and withdrawal plans.

Worker's Sense

A concept regarding an individual's understanding and perception of their place, rights, and responsibilities within the workplace environment.