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    Question

    What is the primary purpose of Qualified Institutional

    Placement (QIP) for listed companies?
    A To raise capital through a public offering. Correct Answer Incorrect Answer
    B To dilute management stake. Correct Answer Incorrect Answer
    C To require elaborate paperwork similar to an IPO. Correct Answer Incorrect Answer
    D To issue equities to retail investors. Correct Answer Incorrect Answer
    E To raise capital by issuing equities to qualified institutional buyers. Correct Answer Incorrect Answer

    Solution

    Qualified Institutional Placement (QIP) is a method used by listed companies to raise capital by issuing equities or other equity convertible securities to qualified institutional buyers. The primary purpose of QIP is to raise capital from institutional investors without diluting the management stake and without the need for extensive paperwork like that required during an initial public offering (IPO).

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