Research Paper on:
Advantages and Disadvantages of Subscription Shares

Unformatted Sample Text from the Research Paper:
of the most favourable way of raising capital for a company. A subscription offer is where there are new shares in a company being offered to the public. This means  the money raised, after fees, will go directly to the company. It is worth noting that a rights issue is known as a privileged subscription issue. A rights issue is  beyond the scope of this paper, but it is where subscription to new shares are first offered to existing shareholders. This is not the case in a subscription issue.  Here there is a wider audience and those who wish to purchase the shares will need to subscribe to them. The system of purchasing the shares is similar to most  systems where new shares are being issued. A prospectus will be issued and those who with to purchase shares will have to apply for them in writing compete with full  payment. In some instances there may not be a requirement for full payment, and share may be art paid form, with following subscriptions. This is more common in government privatised  companies. The UK government undertook this in most f their privatisation programme, it was seen as being beneficial encouraging share ownership in the general public, with those who would not  normally purchase shares. This is the most common type of primary offer for shares. There are advantages and disadvantages to this type of offer, and in considering  them we can assess the way that the company may make a decision to use a subscription issue, rather than other alternatives such as debentures of loan stock. Before  we go any further I this also worth noting the idea of a closed subscription. This is where there is a subscription offer, but only to a select number of