Why should companies issue shares to the public?
At first companies may be reluctant to issue shares because they may think that it dilutes the ownership and that it requires them to disclose information about their business that they would not otherwise have to reveal. But there is a trade off; they can obtain additional capital and they can increase the value of their business through public issue; they may also be able to issue new shares to merge with or acquire other businesses. Most important of all, they can reduce over dependence on bank borrowing which can be very risky.
