Why are rights issue offered?

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Rights issues are offered by the companies to raise additional capital for various purposes.

A company may issue rights account of various reasons as per below:

  1. The company has become cash strapped and needs funds.
  2. For company expansion, takeovers, mergers, acquisitions.
  3. To purchase equipment.
  4. For general corporate purposes.
  5. To repay the loan.


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