Classification of Debentures Classification according to security i) Secured debentures- these are secured against the company’s assets or have a fixed charge against the company’s assets. In the event of the company’s liquidation such debentures will claim from that particular asset. They could be secured against a floating charge in which case the holder can […]
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Classification of Debt Finance Short term finance This ranges from 1 month up to 4 years and is given to customers known to the bank or to lenders. The agreement of this loan will mention both the repayments of principal and interest, and for interest it must identify whether it is simple or compound interest.
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SOURCES OF COMPANY FINANCE Introduction Companies have different alternatives for obtaining funds that is used to finance investment project. They can issue debt or equity securities to archive this goal. Some times lease is also used as an alternative for long term financing. The source of finance has an implication on cost of funds. To
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Objectives of a Firm Profit maximization A company is an entity which invests its resources so as to gain maximum profit –this is a traditional objective of business or cardinal objective. The business must make profits; To give a return to its owners(shareholders) The return must be satisfactory i.e. higher than the bank rate on
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