Page 111 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx
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Financing – Equity finance
Rights issue of shares
New shares are issued to existing shareholders in proportion to their existing
shareholdings.
Rights issues are relatively simple to arrange and do not alter control, but are not
always suitable for raising large amounts of finance.
New issue of shares
Only a quoted company can issue shares to ‘the market’.
Issues can be placings or IPOs (Initial Public Offerings).
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