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What Advantages does issue of debentures over equity shares?
Cost is the major advantage. Debentures are to be serviced for the contracted period of time, while equity servicing is perennial.
What are registered debentures?
Certain debentures are made out in the names of the particular persons whose names appear in the register of debenture holders. Such debentures which appear in this register are known as "Registered Debentures". They are transferable in the same way as shares. Interest as well as the debenture amount in these cases is payable only to the registered holders.
What are the uses of share premium?
Share premium is used for many purposes and 1 of them is redemption of preference shares and debentures
What is potential equity shares?
potential equity shares are those 1. whose resources/considerations has been received and 2. whose resources have been reinvested in business. examples of potential shares are convertible preference shares, convertible debentures, employees stock options and share warrant.
What is Source and application of funds?
sources of Funds 1. Profit from Operations 2. Issue of Shares 3. Issue of Debentures 4. Bank Loan (Long Term) 5. Sale of fixed Assets Application of Funds 1. Expense for operations 2. Redemption of shares 3. Redemption of Debentures 4. Payment of Loans 5. Purchase of Assets
Four components of capital structure?
the components of capital structure(CS) includes: 1. CS with equity sahres only. 2. CS with equity and preference shares. 3. CS with equity and debentures. 4. CS with equity shares, preference shares and debentures.
What Advantages does issue of debentures over equity shares?
Cost is the major advantage. Debentures are to be serviced for the contracted period of time, while equity servicing is perennial.
What are three other names for shares?
Ordinary and preference shares debentures securities also things like equity stock etc.
Under what conditions may the directors of acompany prefer to issue ordinary shares rather than debentures?
ordinary shares are equity whereas debentures are debt - debt is always payable, whereas, equity holders do not always necessarily demand a dividend payment immediately. it would depend on what the company wanted to use the funds for. if the funds were used to fund a project where the returns were not expected for a few years, a company may wish to issue shares rather than debentures as the debentures would have to be paid regardless of when the returns came.
What are registered debentures?
Certain debentures are made out in the names of the particular persons whose names appear in the register of debenture holders. Such debentures which appear in this register are known as "Registered Debentures". They are transferable in the same way as shares. Interest as well as the debenture amount in these cases is payable only to the registered holders.
Sources of long term working capital?
•Equity shares •Debentures •Retained earnings •Public deposits
What are the uses of share premium?
Share premium is used for many purposes and 1 of them is redemption of preference shares and debentures
What you mean by bearer debentures?
these debentures which give an option to their holder to convert them into equity or preference shares at specified rate of exchange after a certain period. when such debenture holders exercise the right of convertion, they cease to be lenders to the company and become its members. the convertible debentures may be fully convertible or partly convertible
Types of fixed income?
Immediate answer coming to my mind is Bank deposits. Debentures and preference shares also fall under this category.
What is potential equity shares?
potential equity shares are those 1. whose resources/considerations has been received and 2. whose resources have been reinvested in business. examples of potential shares are convertible preference shares, convertible debentures, employees stock options and share warrant.
What is redemption of shares and debentures?
A debenture is an unsecured loan you offer to a company. The company does not give any collateral for the debenture, but pays a higher rate of interest to its creditors. In case of bankruptcy or financial difficulties, the debenture holders are paid later than bondholders. Debentures are different from stocks and bonds, although all three are types of investment. Below are descriptions of the different types of investment options for small investors and entrepreneurs.Debentures and SharesWhen you buy shares, you become one of the owners of the company. Your fortunes rise and fall with that of the company. If the stocks of the company soar in value, your investment pays off high dividends, but if the shares decrease in value, the investments are low paying. The higher the risk you take, the higher the rewards you get.Debentures are more secure than shares, in the sense that you are guaranteed payments with high interest rates. The company pays you interest on the money you lend it until the maturity period, after which, whatever you invested in the company is paid back to you. The interest is the profit you make from debentures. While shares are for those who like to take risks for the sake of high returns, debentures are for people who want a safe and secure income.
What is Source and application of funds?
sources of Funds 1. Profit from Operations 2. Issue of Shares 3. Issue of Debentures 4. Bank Loan (Long Term) 5. Sale of fixed Assets Application of Funds 1. Expense for operations 2. Redemption of shares 3. Redemption of Debentures 4. Payment of Loans 5. Purchase of Assets
