Students can go through AP Inter 1st Year Commerce Notes 9th Lesson Sources of Business Finance-II will help students in revising the entire concepts quickly.
AP Inter 1st Year Commerce Notes 9th Lesson Sources of Business Finance-II
→ Non-institutional sources of finance can be categorized into
- Long term sources
- Medium-term sources
- Short-term sources
→ Long-term sources of finance are shares, debentures and retained earnings.
→ Debentures are an important instrument for raising long-term debt capital. Debenture holders are creditors of the company.
→ Equity shareholders do not get a fixed dividend but are paid on the basis of earning by the company.
→ Equity shareholders liabilities is limited to the extent of capital contributed by them in the company.
→ Preference shares resemble debentures as they bear fixed rate of return.
→ Redeemable preference shares are those shares, the investments on which are to be paid back to their respective holders after the completion of a certain time period.
→ The Government of India, in order to provide adequate supply of credit to various sectors of the economy, has evolved a well developed structure of financial institutions in the country. IDBI, SIDBI, IFCILtd, IIBI, ICICI, TFCI, etc.