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1. Shareholders may vote against company policies which are not beneficial to them but are in the company best interests e.g. withholding payment of dividends for investment.
2. a lot of formalities are required before raising ordinary shares capital and may not be suitable when there is an urgent need for finance e.g. floatation costs such as printing a prospectus, advertising expenses etc
3. Payment of dividend to ordinary shareholders is expensive especially when shareholders are widely distributed geographically.
Lellah answered the question on November 8, 2021 at 07:32
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