Finance

Sources of finance * Long/ average Term funds * Short term Long/Medium Term funds: 1. Debentures 2. Convertible debentures 3. Ordinary sh ars 4. Preference shares 5. Loan 6. Mortgage 7. channel angels 8. Venture Capital Trust 9. Leasing 10. Hire purchase 11. Government Grants/Loan 12. Retained Profit DEBENTURES: A type of debt instrument that is not secured by physical addition or collateral. Debentures are backed only by the habitual creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of adhesion in order to secure capital. Like other types of bonds, debentures are documented in an indenture.   Advantages: These advantages are highly dependable on the success rate of the current by-line rate and sparing situation of society. I. + Long term loans Up to 25 years. II. engage charge and it would be nonrecreational on the loan whether or not profits are made this is an expense. Limitations: I. Debenture carriers or suppliers of loan capital have no controlling interest in the Company. II. The cost of debt is demean than cost of equity or preference shares as interest is tax deductible. III.

Debenture economic aid in mobilization of savings from the public particularly from those investors who are risk aversive.  Convertible debentures: Convertible debentures is a debt instrument that peck be converted into stock at the option of the holder or the issuer. Instead of receiving payment, the buyer of the debenture can chose to return key stock in the company. With convertible debentures, the cost of borrowing is lower for the seller since the buyer has the option of converting it into stock. Debentures are tools used by large companies to raise capital for their projects and operations. This is known as a debt offering since the company literally goes into debt to the investors until the price of the debenture is paid back, plus interest, or until it is... If you want to get a profuse essay, order it on our website: Orderessay

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