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प्रश्न
Ratan Ltd. needs to raise funds from the financial market and, hence, considers issuing equity shares. State any four reasons to explain why this source of raising funds is considered by the company.
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उत्तर
- No fixed burden: Equity shares do not burden the company as dividends are based on profit availability and board of directors' intentions. The corporation is not required to pay dividends to equity shareholders, even if it is profitable.
- Permanent Capital: Equity share capital is considered long-term or permanent capital because a firm is not compelled to repay it during its lifetime. It is only reimbursed to shareholders when the company is wound up.
- Risk Capital: Equity capital is referred to as risk capital. In difficult times, a corporation can trade on equity to mitigate the risk associated with equity capital.
- No charge on assets: Equity shares do not generate a levy on the company's assets. A firm is free to use its assets to raise financing.
संबंधित प्रश्न
Big retail stores requires large amount of ............................. capital.
- Fixed
- Working
- Loan
'Indian Logistics' has its own warehousing arrangements at key locations across the country. Its warehousing services help business firms to reduce their overheads, increase efficiency and cut down distribution time.
A state with reason, whether the working capital requirements of 'Indian Logistics' will be high or low.
Explain the following as factor affecting the requirements of fixed capital:
Growth prospects
Explain the following as factor affecting the requirements of fixed capital:
Diversification
Explain the following as factor affecting the requirements of fixed capital:
Level of collaboration
Explain the following as factor affecting the requirement of working capital:
Business cycle
Explain the following as factor affecting the requirements of working capital:
Operating efficiency
Explain the following as factor affecting the requirements of working capital:
Availability of raw material
Which fund in an organisation possess finance for day to day operations
Bright Bulbs Pvt. Ltd., is manufacturing good quality LED bulbs and catering to the local market. The current production of the company is 1,000 bulbs a day. Anita, the marketing manager of the company, surveyed the market and decided to supply the bulbs to five-star-hotels also. She anticipated the higher demand in future and decided to buy a sophisticated machine to further improve the quality and quantity of the bulbs produced. Which factor affected the fixed capital requirements of the company?
