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Introduction: How are Shares Issued? Video Lecture | Accounting for A Level

FAQs on Introduction: How are Shares Issued? Video Lecture - Accounting for A Level

1. How are shares issued in commerce?

Ans. Shares are typically issued in commerce through a process known as an initial public offering (IPO). In an IPO, a company offers its shares to the public for the first time, allowing individuals and institutional investors to purchase them.

2. What is the purpose of issuing shares in commerce?

Ans. The primary purpose of issuing shares in commerce is to raise capital for a company. By selling shares to investors, a company can generate funds that can be used for various purposes such as expanding operations, investing in new projects, or paying off debts.

3. Can companies issue shares after the initial public offering (IPO)?

Ans. Yes, companies can issue additional shares even after the initial public offering. This can be done through secondary offerings, rights issues, or private placements. These subsequent share issuances allow companies to raise further capital or dilute the ownership of existing shareholders.

4. How are shares allocated to investors during an initial public offering (IPO)?

Ans. During an IPO, shares are typically allocated to investors through a process known as book building. In this process, potential investors submit their bids indicating the quantity of shares they are willing to purchase and the price they are willing to pay. Based on these bids, the final offer price and allocation of shares are determined.

5. What are the risks associated with investing in shares issued in commerce?

Ans. Investing in shares issued in commerce carries several risks. The value of shares can fluctuate based on market conditions, company performance, and other factors. Investors may also face the risk of losing their entire investment if the company fails or performs poorly. It is important for investors to conduct thorough research and assessment before investing in shares.

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Oct 09, 2025 Last updated

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	Accounting for A Level 173 videos\|66 docs\|93 tests

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