Advertisements
Advertisements
प्रश्न
Study the following case/situation and express your opinion.
Mr. Rohit, an individual investor, invests his own funds in the securities. He depends on investment income and does not want to take any risk. He is interested in definite rate of income and safety of principal.
- Name the type of security that Mr. Rohit will opt for.
- What does he receive as return on his investment?
- The return on investment which he receives is fixed or fluctuating?
टीपा लिहा
उत्तर
- Mr. Rohit, an individual investor, invests his own funds in the securities. He depends on investment income and does not want to take any risk. So according to me, he should opt for preference shares.
- He will receive the dividend as a return on investment. The dividend received by preference shareholders is fixed. They get dividends prior to equity shareholders.
- Return on investment on preference shares is always fixed, regular, and steady. But they don't have the right to participate in the management of the company. Only equity shareholder has the rights as they are the real owner of the company.
shaalaa.com
Sources of Corporate Finance
या प्रश्नात किंवा उत्तरात काही त्रुटी आहे का?
APPEARS IN
संबंधित प्रश्न
Match the pairs.
| Group 'A' |
Group 'B' |
|
a) Equity Share Capital |
1) Agreement |
|
b) Debenture Trustees |
2) Capitalisation of Profit |
|
c) Preference Shareholders |
3) Bold Investor |
|
d) Debenture Certificate |
4) Venture Capital |
|
e) Bonus Shares |
5) Document of Ownership |
|
6) Capitalisation of Loan |
|
|
7) Safe Capital |
|
|
8) Instrument of Debt |
|
|
9) Trust Deed |
|
|
10) Cautious Investor |
Distinguish between the following.
Owned capital and borrowed capital.
Match the pairs.
| Group ‘A’ | Group ‘B’ |
| a) Debenture certificate | 1) Sum of current assets |
| b) FPO | 2) Decided and declared by the board of directors |
| c) Working capital | 3) Any issue after First-time Public offer |
| d) Final dividend | 4) Sum of current liabilities |
| e) Preference share capital | 5) First-time Public offer |
| 6) Risk capital | |
| 7) Document of ownership | |
| 8) Safe capital | |
| 9) Instrument of debt | |
| 10) Decided by board; declared by members |
Match the pairs:
| Group 'A' | Group 'B' | ||
| (a) | Working capital | (1) | First-time issue of shares |
| (b) | Preference shareholders | (2) | Conversion into secured debentures |
| (c) | FPO | (3) | Debts (borrowed) Capital |
| (d) | Convertible debentures | (4) | Bold investors |
| (e) | Share Capital | (5) | Sum of current assets |
| (6) | Any issue after the IPO | ||
| (7) | Conversion into equity shares | ||
| (8) | The sum of current liabilities | ||
| (9) | Owned Capital | ||
| (10) | Cautious investors | ||
