Companies can raise new equity funding through a number of ways. A rights issue offers existing shareholders the opportunity to purchase additional shares at a discounted price, based on the number of shares an investor already holds. A private share placement is a share issue offered to specific investor groups rather than the public.

1. What are the benefits and costs/ disadvantages for a listed firm looking to raise equity capital through a rights issue? (2 marks)
2. Compared to a rights issue, what are the arguments for and against a private share placement as a means to raise equity capital? (2 marks)