n NISM Certifications
X NISM Series X
Medium

How does the secondary market price of a listed company's shares influence primary market capital raising?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. It indicates the price at which new capital can be raised

    Correct answer

  2. B

    Promoters sell shares at current market prices to raise funds

  3. C

    It has no effect on primary capital raising

  4. D

    It restricts the issue price of new shares

Why this is the answer

The secondary market price helps determine the valuation and pricing of new issues like rights offerings.

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