Week 3 Tute Solutions - Tutorial Week 3 Homework Chapter 2 Financing company operations REVIEW QUESTIONS 7 What is private placement of shares

Week 3 Tute Solutions - Tutorial Week 3 Homework Chapter 2...

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Tutorial Week 3 Homework 1 Chapter 2 – Financing company operations REVIEW QUESTIONS 7. What is private placement of shares? What are the advantages and disadvantages of a private placement? 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.
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