CHAPTER-8 Sources of Business Finance

Internal sources of capital are those that are

(a) generated through outsiders such as suppliers

(b) generated through loans from commercial papers

(c) generated through issue of shares

(d) generated within the business

What is a commercial paper? What are its advantages and limitations.

What is the difference between GDR and ADR? Explain.

Discuss the financial instruments used in international financing.

Name any three special financial institutions and state their objectives.

State the merits and demerits of public deposits and retained earnings as methods of business finance.

What preferential rights are enjoyed by preference shareholders? Explain.

What advantages does issue of debentures provide over the issue of equity shares?

What is the difference between the internal and external sources of raising funds? Explain.

Discuss the sources from which a large industrial enterprise can raise capital for financing modernisation and expansion.

List sources of raising long-term and short-term finance.

Explain trade credit and bank credit as sources of short-term finance for business enterprises.

What is business finance? Why do businesses need funds? Explain.

Under the factoring arrangement, the factor

(a) Produces and distributes the goods or services 

(b) Makes the payment on behalf of the client

(c) Collects the client's debt or account receivables

(d) Transfer the goods from one place to another

Under the lease agreement, the lessee gets the right to

(a) Share profits earned by the lessor

(b) Participate in the management of the organisation

(c) Use the asset for a specific period

(d) Sell the assets

Public deposits are deposits that are raised directly from

(a) The public

(b) The directors

(c) The auditors

(d) The owners

ADRs are issued in

(a) Canada

(b) China

(c) India

(d) USA

Funds required for purchasing current assets is an example of

(a) Fixed capital requirement

(b) Ploughing back of profits

(c) Working capital requirement

(d) Lease financing

The term 'redeemable' is used for

(a) Preference shares

(b) Commercial paper

(c) Equity shares

(d) Public deposits

Equity shareholder are called

(a) Owners of the company

(b) Partners of the company

(c) Executives of the company

(d) Guardian of the company