In the case of a share issue being oversubscribed,the common approaches include:

Question

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Allocating the shares on a pro rata basis is the fairest approach as it ensures that all potential investors receive a portion of the shares in proportion to their original order. It also prevents certain investors from receiving more shares than others, which could lead to accusations of favoritism or unfairness. Increasing the issue price or issuing additional shares could also be options, but they may not be as equitable or feasible in every situation.

In the Case of a Share Issue Being Oversubscribed,the Common