What do private placement covers?a.Sharesb.Preference sharesc.Debenturesd.All of these

Breakdown of the Problem

To understand what private placement covers, we need to identify the types of securities that can be included in a private placement.

Relevant Concepts

Private placement is a method of raising capital by selling securities to a select group of investors rather than through a public offering. The types of securities that can typically be offered during a private placement include:

1. Shares - Common equity shares can be issued to investors.
2. Preference Shares - These are hybrid securities that behave like equity but have preferential rights regarding dividends and asset liquidation.
3. Debentures - These are long-term securities that are not backed by physical assets or collateral.

Analysis and Detail

• Shares: Represents ownership in a company and allows investors to benefit from the company’s growth.
• Preference Shares: Combines characteristics of equity and debt, often appealing in private placements due to their fixed dividends.
• Debentures: They usually carry lower risk due to regular interest payments, appealing to risk-averse investors.

Verify and Summarize

Private placement can cover various financial instruments. Since all three options are permissible under private placements, the correct choice must encompass all these instruments.

Final Answer

The answer is d. All of these. Private placements can cover shares, preference shares, and debentures.