Explain any three disadvantages of issuing equity shares, from the Com – InterviewSolution

InterviewSolution

1.

Explain any three disadvantages of issuing equity shares, from the Company's point of view.

Answer»

1. If only equity shares are issued, the company cannot take the advantage of trading on equity.

2. As equity’ capital cannot be redeemed, there is a danger of over capitalization.

3. Equity’ shareholders can put obstacles for management by manipulation and organizing themselves.

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