Sources of Business Finance

What is business finance primarily concerned with?

• Acquisition and conservation of capital funds

• Employee management

• Marketing strategies

• Product development

What type of capital is required for purchasing fixed assets?

• Working capital

• Fixed capital

• Retained earnings

• Trade credit

Which of the following is NOT a feature of equity shares?

• Higher profits in good years

• Voting rights

• Fixed rate of dividend

• Permanent capital

What is retained earnings?

• Funds borrowed from banks

• Profits reinvested in the business

• Funds raised through issuing shares

• Trade credit extended by suppliers

What is a major limitation of preference shares?

• They provide high returns

• They dilute equity shareholders' claims

• They have voting rights

• They are suitable for high-risk investors

Which of the following is a source of internal finance?

• Bank loans

• Debentures

• Retained earnings

• Public deposits

What is the main advantage of using retained earnings?

• It involves high costs

• It provides operational freedom

• It requires external approval

• It is a temporary source of funds

Retained Earnings are also known as

• Capital

• Ploughing back of profit

• Surplus profit

• Gross Profit

Who among the following is called the owner of the company?

• Debenture holders

• Employees

• Directors

• Equity Shareholders

Preference shareholders get prefernce over equity shares for ..................

• Payment of Dividend

• Voting

• Participation in management

• None of these