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Issue of Shares At Discount Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Issue of Shares At Discount Video Lecture - Advanced Corporate Accounting - B Com

1. What is the meaning of issuing shares at a discount?
Ans. Issuing shares at a discount means selling shares at a price lower than their face value. This practice is regulated by laws and regulations to protect investors and ensure fair market practices.
2. What are the reasons for a company to issue shares at a discount?
Ans. Companies may issue shares at a discount to attract more investors, raise capital quickly, or improve liquidity. However, this practice should be approved by relevant authorities and comply with legal requirements.
3. What are the consequences of issuing shares at a discount?
Ans. Issuing shares at a discount can lead to legal consequences, such as fines or penalties, if not done in accordance with regulations. It can also impact the company's reputation and shareholder confidence.
4. How can shareholders benefit from shares issued at a discount?
Ans. Shareholders can benefit from shares issued at a discount by purchasing more shares at a lower cost, potentially increasing their ownership stake in the company. However, they should be aware of the risks and implications of such transactions.
5. How can companies ensure compliance when issuing shares at a discount?
Ans. Companies can ensure compliance when issuing shares at a discount by seeking legal advice, obtaining necessary approvals, and disclosing all relevant information to investors. It is essential to follow regulations and guidelines to avoid potential legal issues.
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