JAMB Commerce 2018 Objective — Question 2

Question 2 of 40 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2018 Objective paper, with the correct answer and a full explanation.

Rights issue means the

A. issue of shares to the directors of a company on favourable terms
B. issues of shares by a company only to the founders of the company
C. right of shareholders to vote on any issue
D. issue of shares to shareholders on favourable termsCorrect

Explanation

A rights issue is the issue that involves selling new shares to existing shareholders, often for free or at a discount, since they are already members of the company.

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