Sources of Corporate Finance — Secretarial Practice STD 12 Commerce / Arts — Question

What can be the maximum tenure of the debentures to be issued?

Violet Ltd. Company plans to raise ₹ 10 crores by issuing debentures. The Board of Directors has some queries. Please advise them on the following:

Can the tenure of debentures be less than ten years?

What type of source retained earning is?

The management of ‘Maharashtra State Road Transport Corporation’ wants to determine the size of working capital.
Question (a). Being a public utility service provider will it need less working capital or more?
Question (b). Being a public utility service provider, will it need more fixed capital?
Question (c). Give one example of a public utility service that you come across on a day-to-day basis.

Should the company create a charge on its assets?

Within what period should the company issue a Debenture certificate?

There are 2 companies namely company A and company B with the same financial positions and in the same line (producing the same type of products) willing to issue debentures to more than 500 people. Company A is issuing 12% redeemable debentures to be redeemed after 5 years and Company B is issuing 12% convertible debentures which will be converted after 5 years. As an investor.Question (a). Which company would one like to invest in? Question (b) Is it worth investing or going for convertible or redeemable? Why? Question (c) Is there any party to be appointed to look into the safety of debenture holders?

Mr. Satish is a speculator. He desires to take advantage of the growing market for the company’s products and earn handsomely.

What does he receive as a return on his investment?