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Justify the following statement. Capital market is useful for the corporate sector.

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Question

Justify the following statement.

Capital market is useful for the corporate sector.

Justify
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Solution

  1. The capital market is a market that provides long-term loans. It is controlled by SEBI.
  2. The capital market trades in shares, debentures, and mutual funds.
  3. The business sector issues these securities to the market and attracts savings from investors through a number of schemes.
  4. Through this market, corporations, industrial organisations, and financial institutions can access long-term funds from both domestic and overseas markets.
  5. These savings are converted into capital and used to invest in the firm.
  6. It helps to develop the corporate and industrial sectors. Thus, the capital market benefits the corporate sector.
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Chapter 11: Financial Market - Justify the following statements

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