Advertisements
Advertisements
प्रश्न
‘While there are benefits of going public as a source of finance for a company, it also means additional obligations'.
Analyse and justify the statement.
Advertisements
उत्तर
Benefits of going public -
- Access to capital - The primary advantage an entrepreneur stands to gain by going public is access to capital. In addition, the capital does not have to be repaid and does not involve an interest charge.
- Other advantages -
- Mergers and acquisitions: Public stock of a company can be used for businesses to grow through acquisitions.
- Higher valuations: Public companies are typically valued more than private companies.
- Benchmark trading price: The trading price of a public company’s stock serves as a benchmark of the offer price of other securities.
- Capital formation: Raising capital later is typically easier because of the extra liquidity for the investors.
- Less dilution: There is less dilution of ownership control compared to an IPO.
Drawbacks:
- Increasing accountability to public shareholders
- Need to maintain dividend and profit growth trends
- Becoming more vulnerable to an unwelcome takeover.
- Need to observe and adhere strictly to the rules and regulations of governing bodies.
- Increasing costs in complying with a higher level of reporting requirements.
APPEARS IN
संबंधित प्रश्न
Explain the recent Capital Market reforms in India.
Answer each of these questions in about fifteen words:
Name the sources of demand for capital comes from.
Answer each of these questions in about fifteen words:
Name the two players in the capital market.
Answer each of these questions in about fifteen words:
In what forms company can raise capital through primary market?
Answer each of these questions in about one hundred and fifty words:
Explain how capital markets are the most important source of raising finance for an entrepreneur.
Answer each of these questions in about one hundred and fifty words:
What do you understand by capital market? How can the capital market in India be broadly classified into different categories?
Primary market is also known as new issue market.
Explain the following term/concept.
Secondary market
Complete the correlation.
Primary market: New issues launched to raise capital:: ______: Old issues through stock market.
Identify & explain the concept from the given illustration.
Kerala-based company K Jewellers intends to raise ₹1000 crore by fresh issuance of shares.
Bank Rate means.
What is Capital Market?
To be listed on OTCEI, the minimum capital requirement for a company is
What are the methods of floatation in Primary Market?
The most commonly used method for raising funds in primary market is ______.
Full form of NSDL is;
Read the following text and answer the following question on the basis of the same:
ISQM SOLAR Limited is searching for options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI Pvr LTD. to suggest options for the same. DHAN LAXMI PVI LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.
Identify the reason which has made the firm raise funds from the institutional investors :
Read the following text and answer the following question on the basis of the same:
ISQM SOLAR Limited is searching for options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI Pvr LTD. to suggest options for the same. DHAN LAXMI PVI LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.
How much money was raised by the company through E-IPO's?
State any one advantage each for a company that opts for private placement and rights issue as a source to raise funds.
Identify and explain the following concept:
Raju’s father invests his money in a market for long term funds both equity and debt raised within and outside the country.
Complete the correlation:
Money market : Short term funds :: ______ : Long term funds.
Complete the correlation:
Money market : Short term funds :: _____ : Long term funds.
Complete the correlation:
Money market : Short term funds :: ______ : Long term funds
Complete the correlation:
Money market : Short term funds :: ______ Long term funds.
