Question : Case Study: ABC Corporation - Financing Growth Strategies
ABC Corporation, a leading manufacturing company, is looking to finance its growth strategies. The company is exploring various sources of business finance to achieve its expansion goals.
Questions : Debentures and Financial Instruments
What does the term "redeemable" mean in relation to debentures?
Option 1: The debentures can be traded in the stock market
Option 2: The debentures can be converted into equity shares
Option 3: The company is obligated to repay the principal amount
Option 4: The company can defer interest payments on debentures
Correct Answer: The company is obligated to repay the principal amount
Solution : The correct answer is (c) The company is obligated to repay the principal amount
Redeemable debentures are those that the issuing company commits to redeem or repay to the debenture holders at a specified maturity date or through periodic installments. This implies that the company is obligated to repay the principal amount of the debentures to the debenture holders either at a predetermined date in the future or in installments according to the terms and conditions outlined in the debenture agreement.
Questions : Business Finance and Expansion
What does the term "business finance" refer to?
Option 1: Acquiring funds for personal expenses
Option 2: Managing company personnel
Option 3: Investing in stock markets
Option 4: Obtaining funds for business operations and growth
Questions : Different Sources of Finance
What is the primary characteristic of equity shares?
Option 1: Fixed dividend payments
Option 2: Ownership in the company
Option 3: Guaranteed redemption
Option 4: No voting rights
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