Question

Trinity Ltd. Is a company which manufactures blankets. The company needs addition capita for exansion of business. So it issue 50,000 shares of the face value of Rs. 100 each. Before, issuing shares the management of the company decided that they would issue such shares which will not impose any fixed financial charges. In the processus they investors woul be able to earn extra dividends. Teh company collected money from the public and the company' s business expanded. Identify and explain the type of shares issued by Trinity Ltd. Also explain two advantages and two disadvantages of above identified share

Answer 1

Answer:

Starting and building a business is a rewarding endeavor for many entrepreneurs, but it’s hard work. All businesses require capital, and some require a significant amount. Sole ownership may not be the optimal structure when it comes to transitioning leadership, so many business owners sell ownership in their company through shares of stock.