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Chapter 10: Raising Equity Capital
Learning objectives
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After working through this chapter the reader will have a firm grasp of the variety of methods of raising finance by selling shares and will understand a number of the technical issues involved. More specifically you should be able to:
- contrast equity finance with debt and preference shares;
- explain the admission requirements and process for joining the Official List of the London Stock Exchange for the AIM;
- describe the nature and practicalities of rights issues, scrip issues, vendor placing, open offers and warrants;
- give an account of the options open to an unquoted firm wishing to raise external equity finance;
- explain why some firms become disillusioned with quotation, and present balanced arguments describing the pros and cons of quotation.
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