Advertisements
Advertisements
Question
Justify the following statement.
Capital market is useful for the corporate sector.
Advertisements
Solution
- The capital market is a market that provides long-term loans. It is controlled by SEBI.
- The capital market trades in shares, debentures, and mutual funds.
- The business sector issues these securities to the market and attracts savings from investors through a number of schemes.
- Through this market, corporations, industrial organisations, and financial institutions can access long-term funds from both domestic and overseas markets.
- These savings are converted into capital and used to invest in the firm.
- It helps to develop the corporate and industrial sectors. Thus, the capital market benefits the corporate sector.
APPEARS IN
RELATED QUESTIONS
Answer the following question:
An investor wanted to incest RS. 20,000 in Treasury Bills for a period of 91 days. When he approached the Reserve Bank of India for this purpose he came to know that it was not possible.
Identify the reason why the investor could not invest in the Treasury Bill.
Differentiate between ‘primary market’ and ‘secondary market’ on any five basis.
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:
What is the need of secondary market?
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?
Answer each of these questions in about one hundred and fifty words:
What is meant by primary market? Briefly explain the concept of ‘Right Issue for existing companies’.
Answer each of these questions in about two hundred and fifty words:
“An entrepreneur can raise the required capital in the primary market.” Explain the various methods of raising the funds in the primary market by an entrepreneur.
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.
Capital market do not provide _________
The most commonly used method for raising funds in primary market 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 method of floatation of new issues in the primary market, not taken up by ISQM SOLAR LTD.:
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?
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.
Which among the following is NOT a method of raising the required capital in the primary market?
State the following statements are True or False.
Capital market is the market for long-term funds.
