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Which ONE of the following statements is true? Select one: A. A private placement occurs when...

Which ONE of the following statements is true? Select one: A. A private placement occurs when a company sells securities directly to investors such as superannuation funds, commercial banks and wealthy individuals. B. Most private placements involve the sale of equity issues. C. A private placement is arranged and finalised slower than an open public offer. D. The offer price in a private placement is likely to be less than that of an open offer.

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Answer #1

Answer: A. A private placement occurs when a company sells securities directly to investors such as superannuation funds, commercial banks and wealthy individuals.

Explanation:

Private Placement may be defined as selling the securities directly to the particular group of investors other than in the open market in order to raise the funds quickly for expansion and other business activities. These particular group of investors includes superannuation funds, mutual funds, commercial banks and other financial institutions, wealthy individuals, pension funds and insurance companies.

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