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What are the advantages and disadvantages of shares and debentures?
Shares offer the advantage of potential capital appreciation and dividends, giving investors a stake in the company's growth and profits. However, they come with higher risk, as shareholders may lose their investment if the company underperforms. Debentures provide fixed interest returns and are generally less risky, as they have priority over shares in the event of liquidation. On the downside, debentures typically offer lower returns compared to shares and lack the potential for capital gains.
What is better debentures or shares?
The choice between debentures and shares depends on an investor's financial goals and risk tolerance. Debentures offer fixed interest payments and are generally considered safer, making them attractive for conservative investors seeking steady income. In contrast, shares represent ownership in a company and can provide higher returns through capital appreciation and dividends, but they also carry greater risk due to market volatility. Ultimately, a balanced portfolio may include both to diversify risk and enhance potential returns.
What are examples of Debentures?
Debentures are a type of debt instrument that companies issue to raise capital, representing a loan made by investors to the issuer. Examples include convertible debentures, which can be converted into equity shares, and secured debentures, which are backed by specific assets of the company as collateral. Other types include unsubordinated debentures, which have priority over other debts in case of liquidation, and zero-coupon debentures, which do not pay interest but are issued at a discount to their face value.
What is debentures and its types?
Debentures are long-term financial instruments used by companies to raise capital, representing a loan made by investors to the issuer. They typically pay a fixed rate of interest and are secured against the company's assets or may be unsecured. The main types of debentures include convertible debentures, which can be converted into equity shares; non-convertible debentures, which cannot be converted; and redeemable debentures, which are repayable after a specified period, as opposed to irredeemable debentures, which have no fixed maturity date.
What are the ways by which business organization raise capital?
1.SALES OF SHARES: shares are sold to the public and the proceeds becomes part of the company's capital 2. DEBENTURES: This is a loan raised from the public with a fixed interest rate. 3.TRADE CREDIT: buying raw materials etc. On credit 4.Bank loan and overdraft. 5.PLOUGHED BACK PROFIT: Reinvesting part of profits made. POSTED BY MOHAMED DAINKEH.
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.
Sources of long term working capital?
•Equity shares •Debentures •Retained earnings •Public deposits
Merits and demerits of shares and debentures?
Shares represent ownership in a company and can provide dividends and capital appreciation, but they also come with higher risk as their value can fluctuate significantly. Debentures, on the other hand, are debt instruments that offer fixed interest payments and are generally considered safer than shares, but they do not provide ownership rights or the potential for capital gains. While shares can lead to higher returns, they also expose investors to market volatility; debentures offer stability but may have lower overall returns. Ultimately, the choice between shares and debentures depends on an investor's risk tolerance and financial goals.
What are the advantages and disadvantages of shares and debentures?
Shares offer the advantage of potential capital appreciation and dividends, giving investors a stake in the company's growth and profits. However, they come with higher risk, as shareholders may lose their investment if the company underperforms. Debentures provide fixed interest returns and are generally less risky, as they have priority over shares in the event of liquidation. On the downside, debentures typically offer lower returns compared to shares and lack the potential for capital gains.
What does all-equity mean?
The meaning of an all-equity firm is one that has raised its entire capital through the sale of shares. This is form of raising capital is known as equity financing.
What is the nature of shares or debentures in Section 44 of Companies Act?
The nature of shares or debentures in section 44 of the Act is movable and transferable in accordance with the article of association.
What are examples of Debentures?
Debentures are a type of debt instrument that companies issue to raise capital, representing a loan made by investors to the issuer. Examples include convertible debentures, which can be converted into equity shares, and secured debentures, which are backed by specific assets of the company as collateral. Other types include unsubordinated debentures, which have priority over other debts in case of liquidation, and zero-coupon debentures, which do not pay interest but are issued at a discount to their face value.
What is debentures and its types?
Debentures are long-term financial instruments used by companies to raise capital, representing a loan made by investors to the issuer. They typically pay a fixed rate of interest and are secured against the company's assets or may be unsecured. The main types of debentures include convertible debentures, which can be converted into equity shares; non-convertible debentures, which cannot be converted; and redeemable debentures, which are repayable after a specified period, as opposed to irredeemable debentures, which have no fixed maturity date.
Example of capital income of tesco?
Capital income for Tesco can include funds raised through the issuance of shares or bonds. For instance, if Tesco issues new shares to investors, the capital raised contributes to its equity financing. Additionally, any proceeds from the sale of assets, such as property or equipment, can also be considered capital income. This type of income is crucial for funding expansion projects and improving operational capabilities.
What are the ways by which business organization raise capital?
1.SALES OF SHARES: shares are sold to the public and the proceeds becomes part of the company's capital 2. DEBENTURES: This is a loan raised from the public with a fixed interest rate. 3.TRADE CREDIT: buying raw materials etc. On credit 4.Bank loan and overdraft. 5.PLOUGHED BACK PROFIT: Reinvesting part of profits made. POSTED BY MOHAMED DAINKEH.
What is the composition of share capital?
Share capital refers to the funds raised by a company through the issuance of shares to shareholders. It typically consists of two main components: equity shares (common shares) that provide ownership and voting rights, and preference shares that offer fixed dividends but usually do not confer voting rights. The total amount of share capital is determined by the nominal value of the shares multiplied by the number of shares issued. This capital serves as a financial foundation for the company, enabling it to invest in operations and growth.
What is share capital and how raising share capital?
Share capital is the investment in company from public to earn profit and it can be raised by offering shares to public for purchase.
