Share Issue

Question 1

What is a share issue

Answer 1

An occasion when a company makes new shares available for sale, or the number of shares offered.

Question 2

What are the advantages of a share issue

Answer 2

This creates an active continuous source of finance through the shares.

Raises the profile of the business.

Builds awareness about the business.

Question 3

What are the disadvantages of a share issue

Answer 3

The ownership of the business would be diluted through the sale of shares.

There is applied loss of privacy.

There would also be loss of control regarding decisions in the business.

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Question 4

Is a share issue a short term or long term source of finance

Answer 4

Short term source of finance