Question:
Why is equity share capital called Risk Capital'?
Answer:
Equity shareholders get return only when profits is left after paying interest on debentures and fixed return on preference shares. Therefore, it is called risk capital as it bears maximum risk.
Sources of Business Finance
Q 1.
Write a note on international sources of finance.
Q 2.
Give the full form of GDR and ADR.
Q 3.
Differentiate between a share and a debenture.
Q 4.
Explain in detail the types of debenture a company can issue.
Q 5.
In leasing agreement what right is given to lessee?
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.
Why does business enterprise need finance?
Q 12.
What advantage does issue of debentures provide over the issue of equity shares?
Q 13.
State two factors affecting the working capital requirement of a firm.
Q 14.
What do you mean by discounting of bills of exchange?
Q 15.
What is business finance? Why do businesses need funds? Explain.
Q 16.
Specify the objective of I.D.B.I.
Q 17.
What is factoring? Discuss its pros and cons.
Q 18.
Preference shares are preferred by company but not by investors. Why?
Q 19.
Name any three special financial institutions and state their objectives.
Q 20.
State the meaning of finance. What factors determine working capital and fixed capital requirements of a business?
Q 21.
What are Indian depository receipts (IDRs)?
Q 22.
Who regulates the acceptance of public deposits?
Q 23.
What is lease financing? Discuss its merits and demerits.
Q 24.
What are retained profits? Discuss their advantages and disadvantages.
Q 25.
Why is equity share capital called Risk Capital'?
Q 26.
Discuss the financial instruments used in international financing.
Q 27.
State various sources of short and medium term funds.
Q 28.
What are public deposits?
Q 29.
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 30.
Name zones of the Lessors and Lessees in India.
Q 31.
What preferential rights are enjoyed by preference shareholders? Explain.
Q 32.
What is the status of debenture holders?
Q 33.
What is a trade credit?
Q 34.
Explain different types of preference shares which can be issued by a company.
Q 35.
Describe in brief the features of equity shares.
Q 36.
Why preferences are given to preferential shares?
Q 38.
What are the two important functions of factors?
Q 39.
Who are called the owners of a company?
Q 40.
State two factors affecting the fixed capital requirement of a firm.
Q 41.
State various sources of long term funds.
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.
Preference shares are not suitable for which kind of investors?
Q 44.
List sources of raising long-term and short term finance.
Q 45.
What are retained earnings?
Q 46.
List different types of finance.
Q 47.
Write a short note on the features of GDRs.
Q 48.
Describe briefly the factors responsible for selecting a source of finance.
Q 49.
What is the difference between GDR and ADR? Explain.
Q 50.
State the merits and demerits of public deposits and retained earnings as methods of business finance.
