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Answer Posted / b.s.omkareshwar
whenever company will be in need of money for expansion or any other purpose,it gets the money by issuing special type of shares.There shares are primarily offered to the existing share holders at a concessional price.
The share holders after receiving such rights has 3 options
1.Purchase full rights within specified time limit
2.Sell to other people at the price less than the difference of market value and rights value of such shares
3.Partially purchase,partially give to other people
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