which debt instrument is prefered by the campany for
financing?
Answer Posted / sagar dilip shinde
Company preferably uses Debentures for financing because it
has to pay a fixed amount of interest for the period for
which it has taken the debentures.
There is also risk involved in financing through debentures
but this risk is for a short period and con be overcome.
Also financing is done through studying the capital
structure of the company Like-
1)through equity shares and debentures
2)only through debentures
3)only through Equity shares
4)through preference shares and debentures
5)through preference shares , equity shares and debentures
These capital structures need to be studied and after
finding which capital structure yields higher earnings per
share is selected for financing.
EPS is calculated after deducting interests and taxes from
EBIT. this value arrived is known as EAT and it is divided
by No of shareholders.
Is This Answer Correct ? | 4 Yes | 0 No |
Post New Answer View All Answers
What is your perception of Development Officer as a Career?
How YOU prepared for interview?
What do you know about Chief of Planning Commission and Election Commission etc.
What Are The New Features Included In Openpages?
Is There Any Restriction On Maximum Number of Share Holders in Public Limited Company?
What Are Adjusting Entries?
How can a Business firm achive growth Internally and Externally?
Do you know what LAF is?
What are the common factors of 'money laundering'?
What Is Overdraft Protection?
In which bank the government of india has acquired rbo’s stake?
What Is The Securities Transaction Tax?
What is bandhan bank? How is it different from other public and private banks?
What do you mean by limited liability?
What is 'i-net'?