Correct Answer: Both enable companies to raise funds in international markets

Solution : The correct answer is (d) Both enable companies to raise funds in international markets

GDRs and ADRs are both financial instruments that enable companies to raise funds in international markets by issuing depositary receipts. GDRs are issued and traded outside the United States, while ADRs are specifically issued and traded in the United States. They allow companies to tap into a larger pool of investors and access capital from international markets without directly listing their shares on foreign stock exchanges. These instruments represent claims to shares in the issuing company and facilitate investment from investors in different regions around the world.

Correct Answer: Capital market

Solution : The correct answer is (d) Capital market

The capital market is primarily involved in raising capital for long-term investments. The capital market is where long-term financial instruments such as stocks, bonds, and other securities are bought and sold. It's a marketplace for businesses and governments to raise funds for long-term projects, investments, and expansion. The capital market includes both the primary market where new securities are issued and sold for the first time, and the secondary market where existing securities are traded among investors. On the other hand, the money market deals with short-term debt instruments and is more focused on liquidity and short-term financing.

Correct Answer: 5 years 

Solution : The Correct Answer is- 5 years 

The Finance Commission, an institution with constitutional authority, is a crucial part of fiscal federalism. Article 280 of the Constitution discusses the Finance Commission. The Indian Finance Commission is a constitutional body that is appointed every five years by the President of India. The commission's additional members are also chosen by the governor. 

Correct Answer: Equity shares

Solution : The correct answer is (c) Equity shares

Equity shares represent ownership in a company and provide ownership rights and claims on the company's assets and earnings. When a company issues equity shares, it is essentially selling ownership stakes to investors, allowing them to become shareholders and participate in the company's growth and success. This is a common way for companies to raise funds for their operations, expansions, or other financial needs.

Correct Answer: Hilton-Young Commission

Solution : The correct answer is (a) Hilton-Young Commission.

The Hilton-Young Commission, officially known as the Royal Commission on Indian Currency and Finance, was formed in 1925 to review and recommend reforms for India's financial and monetary system. The commission, led by Lord Hilton-Young, submitted its report in 1926, which included recommendations for the establishment of specialized financial institutions to promote industrial development in India.

Based on the recommendations of the Hilton-Young Commission, the Industrial Finance Corporation of India (IFCI) was established in 1948. The IFCI was envisioned as a development finance institution aimed at providing long-term financial assistance to industrial projects in India.

Correct Answer: No dilution of ownership
  

Solution : The correct answer is (a) No dilution of ownership

Preference shares allow companies to raise funds without diluting ownership stakes or control. Unlike issuing additional common equity shares, issuing preference shares does not dilute the ownership of existing shareholders because preference shareholders do not have voting rights and do not participate in the day-to-day decision-making of the company. It allows the company to secure necessary capital while maintaining ownership concentration among existing shareholders. The fixed dividend payments associated with preference shares (option b) are also a characteristic but are not directly related to the advantage of no dilution of ownership.

Correct Answer: The company has the option to buy back the shares

Solution : The correct answer is (c) The company has the option to buy back the shares

Redeemable preference shares are those that the issuing company has the option to buy back or redeem after a certain period, as specified in the terms of the share issue. This provides the company with flexibility in managing its capital structure and financial obligations. It does not involve converting shares into debentures, granting voting rights to preference shareholders , or guaranteeing fixed dividends.

Correct Answer: To fund new business ventures

Solution : The correct answer is (d) To fund new business ventures

Diversification often involves venturing into new business areas, launching new products or services, or entering different markets. These expansions require capital for research and development, marketing, hiring additional staff, acquiring assets, covering operational expenses, and other investment needs. External financing, such as loans or equity investment, provides the necessary funds to support these diversification initiatives and facilitate the successful expansion of the business into new ventures. Options a, b, and c are not relevant to the need for external financing in the context of diversification.

Correct Answer: To fund its expansion plans and meet capital requirements

Solution : The correct answer is (d) To fund its expansion plans and meet capital requirements

Expanding operations in a business often requires substantial capital investment for various purposes, such as acquiring new assets, increasing production capacity, entering new markets, hiring additional staff, and covering increased operational expenses. Business finance is essential to provide the necessary funding to support these expansion initiatives and ensure the company's growth and sustainability in the market.