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Study the following cases and express your opinion.TRI. Ltd company is a newly incorporated public company and wants to raise share capital by issuing equity shares in the market. The board of directors is considering various options for this. Advise the board on the following matters:(a). What should the company offer – IPO or FPO?(b). Can the company offer Bonus shares to raise its capital?(c). Can the company enter into an underwriting Agreement? |
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Answer» (a) The Company should offer IPO. (b) The company cannot offer Bonus Shares. Bonus Shares are given out of only accumulated capital or reserves only. (c) Yes. The company can enter into an Underwriting Agreement. The underwriters assure the company to take up the unsold shares so that company can be able to raise the minimum subscription. |
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