Question:
Write a note on international sources of finance.
Answer:
- Commercial banks: Commercial banks all over the world extend foreign currency loans for business purposes. For e.g. Standard Chartered emerged as a major source of foreign currency loans to the Indian industry. The types of loans and services provided by banks vary from country to country.
- International agencies and Development banks: These bodies provide long and medium term loans and grants to promote the development of economically backward areas in the world. The more notable among them include International Finance Corporation(IFC), EXIM Bank and Asian Development Bank.
- International Capital Markets: Modern organizations including multinational companies depend upon sizeable borrowing in rupees as well as in foreign currency Prominent financial instruments used for this purpose are:
1. Global Depository Receipts (GDR’s)
2. American Depository Receipts(ADR’s)
3. Foreign Currency Convertible Bonds(FCCB’s)
Sources of Business Finance
Q 1.
Write a note on international sources of finance.
Q 2.
Differentiate between a share and a debenture.
Q 3.
In leasing agreement what right is given to lessee?
Q 4.
Give the full form of GDR and ADR.
Q 6.
Explain in detail the types of debenture a company can issue.
Q 7.
What is a commercial paper? What are its advantages and limitations?
Q 8.
Name two sources of funds under owner's fund.
Q 9.
Which deposits are directly raised from the public?
Q 10.
Explain trade credit and bank credit as sources of short term finance for business enterprises.
Q 11.
State two factors affecting the working capital requirement of a firm.
Q 12.
What advantage does issue of debentures provide over the issue of equity shares?
Q 13.
What do you mean by discounting of bills of exchange?
Q 14.
Why does business enterprise need finance?
Q 15.
Specify the objective of I.D.B.I.
Q 16.
Preference shares are preferred by company but not by investors. Why?
Q 17.
What is business finance? Why do businesses need funds? Explain.
Q 18.
Who regulates the acceptance of public deposits?
Q 19.
State the meaning of finance. What factors determine working capital and fixed capital requirements of a business?
Q 20.
What is factoring? Discuss its pros and cons.
Q 21.
Name any three special financial institutions and state their objectives.
Q 22.
What are Indian depository receipts (IDRs)?
Q 23.
What is lease financing? Discuss its merits and demerits.
Q 24.
Discuss the financial instruments used in international financing.
Q 25.
Why preferences are given to preferential shares?
Q 26.
What are retained profits? Discuss their advantages and disadvantages.
Q 27.
State various sources of short and medium term funds.
Q 28.
Why is equity share capital called Risk Capital'?
Q 29.
Explain different types of preference shares which can be issued by a company.
Q 30.
Retained earnings are not a good source from the values point of view as it is the right of equity shareholders. Do you agree? Justify your answer.
Q 31.
What are public deposits?
Q 32.
Name zones of the Lessors and Lessees in India.
Q 33.
What is the status of debenture holders?
Q 35.
Describe in brief the features of equity shares.
Q 36.
What preferential rights are enjoyed by preference shareholders? Explain.
Q 37.
What are the two important functions of factors?
Q 38.
What is a trade credit?
Q 39.
Who are called the owners of a company?
Q 40.
State various sources of long term funds.
Q 41.
What is the difference between GDR and ADR? Explain.
Q 42.
State two factors affecting the fixed capital requirement of a firm.
Q 43.
Mr. John has ? 1,00,000 for investment purposes. Should he invest in equity shares, preference shares, public deposits or debentures? Justify your answer.
Q 44.
List sources of raising long-term and short term finance.
Q 45.
List different types of finance.
Q 46.
What are the preferences given to preference shareholders?
Q 47.
Preference shares are not suitable for which kind of investors?
Q 48.
Classify internal and external sources on the basis of time.
Q 49.
Describe briefly the factors responsible for selecting a source of finance.
Q 50.
As a source of finance retained profit is better than other sources. Do you agree with this view? Give reasons for your answer.
