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Right issues means selling shares to existing shareholders bearing in mind the pre emptive right of the shareholders. In the light of this, mention any five circumstances under which it would be more beneficial for shareholders to take up the right rather than sell it in whole or in part?
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Right issues means selling shares to existing shareholders bearing in ...

Five Circumstances where Shareholders should take up the Right:

1. Undervalued Shares: If the current market price of the shares is lower than the subscription price offered in the right issue, it would be more beneficial for shareholders to take up their rights. By doing so, they can acquire additional shares at a discounted price, which could potentially increase their overall return on investment.

2. Long-Term Growth Potential: If the company has a strong growth potential in the long run, taking up the rights and investing more capital can help shareholders benefit from the future growth of the company. This can lead to an increase in the value of their investment over time.

3. Tax Benefits: In some jurisdictions, taking up the rights and acquiring additional shares may offer tax benefits to shareholders. By holding onto the shares for a certain period of time, they may be eligible for tax advantages such as lower capital gains tax rates or tax-deferred growth.

4. Control and Voting Rights: By taking up the rights and acquiring more shares, shareholders can increase their ownership stake in the company. This can give them greater control over the company's decision-making process and voting rights in important matters, allowing them to have a say in the company's future direction.

5. Dividend Income: If the company has a history of paying regular dividends, taking up the rights and acquiring more shares can lead to an increase in dividend income for shareholders. This can provide them with a steady stream of passive income, which can be beneficial for investors seeking regular cash flow from their investments.

Overall, taking up the rights in a right issue can be more beneficial for shareholders in various circumstances, depending on their investment goals, the company's growth prospects, and the current market conditions.
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Right issues means selling shares to existing shareholders bearing in mind the pre emptive right of the shareholders. In the light of this, mention any five circumstances under which it would be more beneficial for shareholders to take up the right rather than sell it in whole or in part?
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Right issues means selling shares to existing shareholders bearing in mind the pre emptive right of the shareholders. In the light of this, mention any five circumstances under which it would be more beneficial for shareholders to take up the right rather than sell it in whole or in part? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Right issues means selling shares to existing shareholders bearing in mind the pre emptive right of the shareholders. In the light of this, mention any five circumstances under which it would be more beneficial for shareholders to take up the right rather than sell it in whole or in part? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Right issues means selling shares to existing shareholders bearing in mind the pre emptive right of the shareholders. In the light of this, mention any five circumstances under which it would be more beneficial for shareholders to take up the right rather than sell it in whole or in part?.
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