TOPIC: ANALYSIS OF EQUITY SHARE CAPITAL AS A SOURCE OF FINANCE IN AN ORGANISATION

RESEARCH PAPERS
The 2 research papers under study are 1. The effect of CEO ownership and shareholder rights on cost of equity share capital. 2. What motivates seasoned equity offerings? Evidence from the use of issue proceeds.
COST OF EQUITY CAPITAL AND ITS EFFECTS TO THE MANAGEMENT
Introduction
This paper investigates the cost of equity capital and its effects to the management which intends to hinder shareholders right. The purpose of which is to investigate whether managerial ownership affects the associations between the shareholders rights and the cost of equity capital. There are two variables in the article which can be clearly identified. The variables are;
1) The shareholders rights and
2) The cost of the equity capital.

1) THE SHAREHOLDERS
Shareholders should have the right to discipline the managers, who are the employees of the organization, in the case of the mismanagement or the improper use of the funds. The shareholders have right to demand for the success of the organization through competing aggressively in order to gain profitability. The shareholders have right to elect and remove the management from the office and also to access or evaluate the books of accounts of the organization.
2) COST OF EQUITY CAPITAL
Rate of return of equity
Current market price and the nominal value of equity capital

CONCEPTUAL FRAMEWORK
THE AGENCY PROBLEMS: THE MANAGEMENT VERSUS SHAREHOLDERS
Whenever ownership is derived from control a conflict of interest arises. Management may take some actions that are inconsistent with the shareholders wealth maximizations goal and this will cause a conflict of interest. The major cause of conflicts between shareholders and the management includes; a. The incentive problems:
Most managers have fixed salaries and may