Question:
Debentures are good from debenture holders point of view but not for business. Do you agree? Explain.
Answer:
Debentures are similar to shares, however, debenture holders do not have voting rights on how the business is run.
Debentures have certain merits and demerits from business as well as debenture holders point of view. These are explained below:
Advantages to Debenture Holders
- They receive annual interest/ benefits (VIP status or free passes) regardless of whether or not the business is making money.
Disadvantages to Debenture Holders
- No say in how the business will run.
- Greatly depends on the business’ success to reuse it’s value.
Advantages to Business
- Provides good long-term finance without losing control of the business.
Disadvantages to Business
- Firm increases the amount of long-term liabilities raising the amount of interest payments to the lenders.
Sources of Business Finance
Q 1.
Write a note on international sources of finance.
Q 2.
In leasing agreement what right is given to lessee?
Q 3.
Differentiate between a share and a debenture.
Q 4.
Give the full form of GDR and ADR.
Q 5.
What is a commercial paper? What are its advantages and limitations?
Q 6.
Explain in detail the types of debenture a company can issue.
Q 8.
Name two sources of funds under owner's fund.
Q 9.
Explain trade credit and bank credit as sources of short term finance for business enterprises.
Q 10.
Which deposits are directly raised from the public?
Q 11.
State two factors affecting the working capital requirement of a firm.
Q 12.
Why does business enterprise need finance?
Q 13.
What do you mean by discounting of bills of exchange?
Q 14.
What advantage does issue of debentures provide over the issue of equity shares?
Q 15.
Specify the objective of I.D.B.I.
Q 16.
What is business finance? Why do businesses need funds? Explain.
Q 17.
Preference shares are preferred by company but not by investors. Why?
Q 18.
What is factoring? Discuss its pros and cons.
Q 19.
Who regulates the acceptance of public deposits?
Q 20.
State the meaning of finance. What factors determine working capital and fixed capital requirements of a business?
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.
Explain different types of preference shares which can be issued by a company.
Q 26.
What are retained profits? Discuss their advantages and disadvantages.
Q 27.
Why is equity share capital called Risk Capital'?
Q 28.
State various sources of short and medium term funds.
Q 29.
Why preferences are given to preferential shares?
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 34.
Describe in brief the features of equity shares.
Q 35.
What are the two important functions of factors?
Q 37.
What preferential rights are enjoyed by preference shareholders? Explain.
Q 38.
Who are called the owners of a company?
Q 39.
What is a trade credit?
Q 40.
State various sources of long term funds.
Q 41.
State two factors affecting the fixed capital requirement of a firm.
Q 42.
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 43.
What is the difference between GDR and ADR? Explain.
Q 44.
What are retained earnings?
Q 45.
Classify internal and external sources on the basis of time.
Q 46.
What are the preferences given to preference shareholders?
Q 47.
List different types of finance.
Q 48.
Write a short note on the features of GDRs.
Q 49.
List sources of raising long-term and short term finance.
Q 50.
Preference shares are not suitable for which kind of investors?
