when a company sells shares to existing shareholders at preferential rate, this is
Answer Details
A "right issue" is when a company offers existing shareholders the opportunity to purchase additional shares at a preferential rate. This is usually done as a way to raise capital, and existing shareholders are given the first opportunity to invest in the company before the shares are made available to the general public. The preferential rate means that the price of the shares is lower for existing shareholders than it would be for new investors. This is a way for the company to reward its existing shareholders and give them an opportunity to increase their investment in the company.