When a company sells shares to existing shareholders at preferential rate, this is?

A. a right issue
B. bonus issue
C. private placing
D. issue by introduction

Correct Answer: Option A

A. a right issue

Explanation

A rights issue is when shares are offered to existing shareholders to purchase additional stock shares, known as subscription warrants, in proportion to their existing holdings. Rights are often transferable, allowing the holder to sell them in the open market.