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Questions
What are the two merits of issuing equity shares?
What are the two merits of issuing equity capital?
Short Answer
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Solution
- Permanent Capital: Equity shares provide permanent capital to the company, as they do not have to be repaid during the lifetime of the business.
- No Fixed Obligation: There is no compulsory payment of dividend on equity shares, so the company is not burdened with fixed costs like interest.
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