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Explain Any Three Disadvantages of Issuing Equity Shares, from the Company'S Point of View. - Commerce

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Question

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

Answer in Brief
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Solution

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

2. As equity capital cannot be redeemed, there is a danger of overcapitalization.

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

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2018-2019 (March) Set 1
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