Question:
Explain different types of preference shares which can be issued by a company.
Answer:
Different types of preference shares are discussed below:
- Cumulative and Non-cumulative: The preference shares which enjoy the right
to accumulate unpaid dividends in future years if it is not paid during a year are termed as cumulative preference shares. On the contrary, a non-cumulative preference share is one in which dividend is not accumulated if it is not paid in the particular year. .
- Participating and Non-participating Preference Shares: Those preference shares which have a right to participate in further surplus of a company’s shares which after dividend at certain rate has been paid on equity shares are called participating preference shares. Those preference shares which do not have a right to participate in further surplus of a company's shares which after dividend at certain rate has been paid on equity shares are called non-participating preference shares.
- Convertible and Non-convertible Preference Shares: Those preference shares which can be converted into equity shares within a specified period of time are called convertible preference shares. On the contrary, preference shares which cannot be converted into equity shares within a specified period of time are called non-convertible preference shares.
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.
What is a commercial paper? What are its advantages and limitations?
Q 6.
Give the full form of GDR and ADR.
Q 7.
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.
What do you mean by discounting of bills of exchange?
Q 13.
Why does business enterprise need finance?
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.
Who regulates the acceptance of public deposits?
Q 19.
What is factoring? Discuss its pros and cons.
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.
Why is equity share capital called Risk Capital'?
Q 26.
What are retained profits? Discuss their advantages and disadvantages.
Q 27.
Explain different types of preference shares which can be issued by a company.
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 are the two important functions of factors?
Q 34.
What is the status of debenture holders?
Q 35.
Describe in brief the features of equity shares.
Q 37.
What is a trade credit?
Q 38.
Who are called the owners of a company?
Q 39.
What preferential rights are enjoyed by preference shareholders? Explain.
Q 40.
State two factors affecting the fixed capital requirement of a firm.
Q 41.
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 42.
State various sources of long term funds.
Q 43.
Describe briefly the factors responsible for selecting a source of finance.
Q 44.
Debentures are good from debenture holders point of view but not for business. Do you agree? Explain.
Q 45.
What is the difference between GDR and ADR? Explain.
Q 46.
What are the preferences given to preference shareholders?
Q 47.
Preference shares are not suitable for which kind of investors?
Q 48.
What are retained earnings?
Q 49.
List different types 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.
