Sources of capital - SS1 Commerce Past Questions and Answers - page 1
What is a debenture?
A share in a company
Short-term borrowing facility
Long-term debt instrument
Which source of capital allows investors to become partial owners of a company?
Loans
Shares
Retained profit
What is the purpose of retaining profits within a company?
Providing a source of capital for future investments
Paying dividends to shareholders
Financing short-term expenses
What is an overdraft?
Long-term borrowing facility
Funds borrowed from individuals
Short-term borrowing facility
Which source of capital involves regular interest payments and repayment of principal?
Loans
Shares
Debentures
State one advantage of issuing shares for a company.
Shareholders can benefit from the company's profits through dividends.
What is the primary purpose of obtaining a loan for a company?
To finance various activities such as purchasing assets, funding projects, or managing cash flow.