When a company raises additional capital by selling shares directly to the public through insurance companies or investment houses, this is known as
Answer Details
When a company raises additional capital by selling shares directly to the public through insurance companies or investment houses, this is known as "private placing".
Private placing is a method used by companies to raise additional capital by selling shares to a small group of investors or institutions. These investors may include insurance companies, investment houses, or other institutional investors. The shares are not offered to the general public and are instead sold privately.
Private placing allows companies to raise capital quickly and efficiently without the need for a public offering. It is often used by companies that do not meet the requirements for listing on a stock exchange or that do not want to go through the expense and regulatory requirements of a public offering.
In contrast, a rights issue is an offering of additional shares to existing shareholders, a bonus issue is a distribution of free shares to existing shareholders, a debenture issue is a type of bond offering, and a preference share issue is an offering of shares that pay a fixed dividend but have no voting rights. While these options may be related to raising capital, they do not specifically refer to the method of selling shares directly to the public through insurance companies or investment houses.