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Essay / Research Paper Abstract
This 5 page paper explains what a subscription issue is, and considers the advantages and the disadvantages of these type of share offers. The bibliography cites 5 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEsubiss.rtf
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Unformatted sample text from the term 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
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