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Limitations

(i) Investors who want steady income may not prefer equity shares as equity shares get
fluctuating returns;

(ii) The cost of equity shares is generally more as compared to the cost of raising funds
through other sources;

(iii) Issue of additional equity shares dilutes the voting power, and earnings of existing
equity shareholders;

(iv) More formalities and procedural delays are involved while raising funds through

issue of equity share.

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