UNIQUE ANSWERS PLEASE Q1- What is the significance of voting rights to the ordinary shareholders? What is a proxy? Why do proxy fights occur?  Q2- Briefly explain the factors that influence the planning of the capital structure in practice

Q1. Significant of voting right to the ordinary shareholders

- ordinary shareholders have a power of appointment of directors at annual general meeting

- decision relating to significantly changes to the aims or object of the company

- in case of merger and acquisition or stocks split shareholders have a right to vote on this matter etc.

What is a proxy ?

Proxy is like an agent of members for act on the behalf of members ( example - proxy can exercise voting right in the absence of members at meeting )

Why do proxy fight occurres ?

Proxy fight occurres when shareholders are dissatisfied and in such a situation a shareholders conven to other shareholders to fight against management and make a pressure on management.

Q2 factors affecting the planning of capital structure

- expected cash flow which will be achieved

- time period of financing

- what market conditions is prevailing

-expected sales and their stability

- cost of capital

- maturity period of instruments

- nature of instruments

Q.3 bonus shares

Bonus shares are shares which are distributed free of cost to the existing shareholders of the company

This is make because of capitalisation of companies retained earnings and security premium account

If we issue bonus share the existing no: of shareholding will increase of shareholders