Question : Case Study 8:
JKL Ltd. is a real estate company planning to raise funds for a large-scale construction project.
Question :
To fund its construction project, JKL Ltd. is considering issuing long-term debt. What type of financial instrument might it use?
Option 1: Commercial paper
Option 2: Equity share
Option 3: Treasury bill
Option 4: Debenture
Correct Answer: Debenture
Solution : The correct answer is (d) Debenture
To fund its construction project, JKL Ltd. might consider issuing debentures, which are long-term debt instruments. Debentures are a form of long-term borrowing where a company issues bonds to investors, promising to repay the principal amount along with interest at a specified future date.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile