Disadvantages of floatation of new shares, Finance Basics

Disadvantages of Floatation of New Shares

1. The cost of getting a quotation is high, mainly when a new issue of shares is completed and the company is small. It means that substantial costs are fixed and so are relatively greater for small companies. The annually cost of keeping the quotation may be high also because of such things as increased disclosure, keeping a larger share register, printing more annually reports.

2. The improved disclosure requirements may be disliked via management.

3. The market-determined price and the greater accountability to shareholders such comes along with its concerning the company's performance may not be liked through management.

4. Control of a particular group of shareholders may be diluted through permitting a proportion of shares to be held via the public.

5. There will be a greater likelihood of particular the subject of a takeover bid and it may be hard to defend it along with wide share ownership.

6. Management situations, management workers provide themselves more salaries because of prosperity obtained.

Posted Date: 2/1/2013 1:39:35 AM | Location : United States

Related Discussions:- Disadvantages of floatation of new shares, Assignment Help, Ask Question on Disadvantages of floatation of new shares, Get Answer, Expert's Help, Disadvantages of floatation of new shares Discussions

Write discussion on Disadvantages of floatation of new shares
Your posts are moderated
Related Questions
Define the term - Right Issues If an existing company intends to raise extra funds, it can do so by borrowing or b issuing new shares. One of the most general methods for a

A manufacturing organisation has three production cost centres, the cutting department, the processing department and the finishing department, and two service cost centres, the st

Role of Stock Exchange in Economic Development The Roles of Stock Exchange in Economic Development are as follow: 1. Raising Capital for Businesses The Stock Exchange

Hatch System - Stock Exchange This is an automatic system based on the assumption such when investors sell at a certain percent age below the top of the market and buys at a s

What are the Advantages of Listing on Stock Exchange (i) Detailed information about company is available. (ii) Information increases activity of purchase and sale of the sec

The information in the table below is available for a large fund-raising project. a. Determine the critical path and the expected completion time of the project. b. Plot the

Agency Relationship between Government and the Shareholders Shareholders and via extension, the company they own operate within the environment requiring the charter or licens

Buying Shares of a Company Factors should be refer when Buying Shares of a Company 1. Economic situation of the country and other non-economic factors as like unfavorable c

ROA - Return on Assets The Average of the industry ROA was 10.02% for 2004, 6.81% for 2005, and 7.32% for 2006. The chart showed that Lenovo had a little bit higher ROA th