Correct Answer: To raise funds without diluting voting rights

Solution : The correct answer is (d) To raise funds without diluting voting rights

Preference shares allow companies to raise funds from investors without diluting the voting control or ownership of the existing shareholders. Unlike equity shares, preference shares usually do not carry voting rights, enabling the company to secure funding while keeping voting control concentrated among the current ownership or management. Preference shares also provide the company with the flexibility to offer a fixed dividend to investors, ensuring a predictable cash outflow to shareholders, which can be appealing to certain investors and can aid in financial planning.

Correct Answer: Ownership in the company
   

Solution : The correct answer is (b) Ownership in the company

Equity shares represent ownership or equity ownership in a company. Shareholders who hold equity shares have ownership rights in the company, which typically includes voting rights, the right to share in the company's profits (through dividends), and the right to participate in decision-making processes related to the company's operations and policies. Unlike debt securities (e.g., debentures), equity shares do not guarantee fixed interest payments or redemption; instead, the dividend payments to equity shareholders are variable and based on the company's profitability and the decisions of the company's board of directors.

Correct Answer: No dilution of ownership
 

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

Equity shares provide a way for PQR Enterprises to raise capital without incurring debt or having to make fixed payments, thus avoiding the obligation of repayment associated with loans or debentures. Additionally, issuing equity shares does not dilute the ownership stake of existing shareholders. Equity shareholders retain ownership rights and control over the company without a fixed commitment to pay dividends, providing more flexibility in managing the company's finances. 

Correct Answer: Statement 1 is true, and statement 2 is false.
    

Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.

Statement 1 is true. Financial planning is crucial for optimizing the allocation of funds across various activities within a business. It involves analyzing financial resources and determining the best allocation to achieve the organization's goals and objectives efficiently.

Statement 2 is false. Financial planning does not focus only on the allocation of funds to marketing activities. Financial planning is a comprehensive process that considers allocation of funds across all areas of a business, including operations, marketing, research and development, expansion, debt repayment, investments, and more. It aims to optimize the allocation of funds across all relevant aspects of the business.

Correct Answer: Commercial paper

Solution : The correct answer is (d) Commercial paper

If LMN Corporation decides to issue short-term debt to finance its international operations, it might use commercial paper as a money market instrument. Commercial paper is a short-term unsecured promissory note issued by corporations and financial institutions to meet short-term funding needs. It is a common choice for companies seeking short-term financing to support their operations, including international ventures. Commercial paper typically has maturities ranging from a few days to 270 days.

Correct Answer: It enables Indian companies to raise funds abroad

Solution : The correct answer is (c) It enables Indian companies to raise funds abroad

IDR stands for Indian Depository Receipts. An IDR is a financial instrument denominated in Indian Rupees and issued by a domestic depository in India. It allows Indian companies to raise funds from international investors in the form of depository receipts. This mechanism enables Indian companies to tap into international capital markets without directly listing their shares on foreign exchanges.

Correct Answer: Commercial paper
 

Solution : The correct answer is (a) Commercial paper

Commercial paper is a short-term unsecured promissory note issued by corporations to raise funds quickly. It is a common choice for businesses looking for short-term financing to support various operational needs, including acquisitions. It provides a quick and cost-effective way to access funds, making it suitable for financing acquisition plans in the short term.

Correct Answer: To allocate funds for new ventures effectively

Solution : The correct answer is (d) To allocate funds for new ventures effectively

Financial planning is essential for diversification as it involves assessing the financial requirements of entering new business areas, determining the amount of funding needed, and devising a strategic plan to allocate funds efficiently. Effective financial planning helps in managing the resources, optimizing budgets, securing necessary financing, and ensuring that the new ventures are adequately funded for successful implementation. This ensures that the company's diversification efforts are financially sustainable and aligned with the broader strategic goals of the organization. Options a, b, and c are not directly related to the significance of financial planning for diversification.

Correct Answer: State Bank of India

Solution : The correct option is the State Bank of India.

The State Bank of India (SBI) launched the "Gram Seva Program" on Gandhi Jayanti 2022, targeting comprehensive village development in education, healthcare, livelihoods, and infrastructure.

Correct Answer: To support green projects that require funding

Solution : The correct answer is (c) To support green projects that require funding

Sustainable initiatives, such as those focusing on environmentally friendly practices and technologies, often require significant upfront investment. These projects may involve research and development of sustainable technologies, transitioning to renewable energy sources, implementing waste reduction measures, or adopting eco-friendly manufacturing processes. These initiatives demand substantial financial resources for planning, execution, and ongoing sustainability efforts.