nature and regulates 3 mark theory Flashcards
1
Q
What is private placement of shares? What are the advantages and disadvantages of a private placement? (LO5)
A
A private placement is an issue of shares to a large institutional investor.
The main advantages are speed, price and direction.
The disadvantage is that existing shareholders experience a dilution of their ownership as well as an ability to make a profit if there had been a rights issue instead of a private placement.
