Question : Case Study 21:
ABC Enterprises is a startup in the renewable energy sector aiming to raise funds for its innovative projects.
Question :
To fund its renewable energy projects, ABC Enterprises is considering issuing bonds. What type of financial instrument is this?
Option 1: Corporate bond
Option 2: Equity share
Option 3: Treasury bill
Option 4: Debenture
Correct Answer: Debenture
Solution : The correct answer is (d) Debenture
When ABC Enterprises considers issuing bonds to fund its renewable energy projects, the appropriate financial instrument is a debenture. A debenture is a type of long-term debt instrument issued by corporations or governments to raise capital. It is typically not secured by specific assets but rather by the general creditworthiness and reputation of the issuer.
In this scenario, considering ABC Enterprises is a startup seeking to fund its renewable energy projects, issuing debentures would be a suitable choice for securing long-term debt financing.
ABC Enterprises is looking to raise capital for its renewable energy projects. Which type of market activity would be associated with this goal?
Option 1: Primary market
Option 2: Currency swap
Option 3: Mergers and acquisitions
Option 4: Secondary market trading
Question : Case Study 13:
XYZ Corporation is a conglomerate planning to diversify its operations by entering the renewable energy sector.
XYZ Corporation is issuing bonds with a fixed interest rate and maturity period of 10 years to fund its renewable energy projects. What type of bonds are these?
Option 1: Convertible bonds
Option 2: Floating-rate bonds
Option 3: Zero-coupon bonds
Option 4: Corporate bonds
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