Companies are financed in two ways, either with equity or debt financing.’ Considering the above statement, discuss the following sources of long-term financing of a business:
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Unit- Long term financing
Companies are financed in two ways, either with equity or debt financing.’
Considering the above statement, discuss the following sources of long-term financing of a business:
4.1 Ordinary shares
4.2 Preference shares
4.3 Debentures
4.4 Convertibles
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- The cost of equity is _______. A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnoverWhich of the following can be categorized as Short term sources of finance ?i Equity Sharesii Trade Creditiii Debentureiv Money Market Instruments a.Only Equity Shares b.Both Equity Shares and Debentures c.Only Money Market Instruments d.Both Money Market Instruments and Trade CreditBootstrap financings are buyouts financed by a. the company managers' own assets, b. finance companies, c. junk bonds, d. new issuance of bonds.
- The cost of equity is ________. Group of answer choices A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnoverWhich of the following can be categorized as Long term sources of finance ? i Equity Shares ii Trade Credit iii Debenture iv Money Market Instruments a. Both Money Market Instruments and Trade Credit b. Both Equity Shares and Debentures c. Only Equity Shares d. Only Money Market InstrumentsWhich of the following can be categorized as Short term sources of finance? i Equity Shares ii. Trade Credit iii Debenture iv Money Market Instruments a. Only Money Market Instruments b. Only Equity Shares c. Both Equity Shares and Debentures d. Both Money Market Instruments and Trade Credit
- A debenture is ABU DA equity capital of the company another name for share capital a loan convertible into shares in the future a loan usually secured on the business' assetsWhich one of the following is referred as debt finance? a. Purchase of T-Bills. O b. Sale of bonds. O c. Issue of equity shares С. d. Issue of Preference sharesExplain the risk of investing in a company based on debt-equity-ratio.
- What does each of the following definitions refer to: The specific mixture of long-term debt and equity the firm uses to finance its operations.Under this concept, the entity would first use a fixed ratio of retained earnings and long-term debt financing to meet its financing needs *a. Retained earnings breakpointb. Signalling Theoryc. Pecking Order Theoryd. Financial leverageThe share capital of a company may consist of: Select one: a. Loans from banks. b. Ordinary or preference shares issued by the company either fully paid or partly paid. c. Debentures issued by the company. d. Secured and unsecured notes issued by the company.