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.
JKL Ltd. wants to raise capital for its construction project. Which market should it consider for issuing new securities?
Option 1: Primary market
Option 2: Secondary market
Option 3: Money market
Option 4: Capital market
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