Chapter 5 PROSPECTUS DEFINITION [SECTION 2(36)] • Any document inviting deposits from the public for the subscription or purchase of any securities of a body corporate. Following types of documents are prospectus: - ❑ Any document described or issued as prospectus; including ❑ any notice‚ ❑ circular‚ ❑ advertisement or ❑ other document • Ingredient to constitute a “prospectus” i) There must be an “invitation to the public”; ii) The invitation
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capital from external investors with an agreement to pay back with interest at a certain time. Debentures are custom in raising additional funding (debt offering) for organizational operations or expenditures. Organizations are in debt to stockholders until the bond matures. Moreover‚ debt is found in the organization’s balance sheet. Organizations choose to raise additional capital by the debentures and not have to use company assets or give up a percentage of ownership in the company.
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Liabilities Share Capital 20‚00‚000 25‚00‚000 Reserve and Surplus 4‚20‚000 4‚70‚000 Profit and Loss Account 3‚80‚000 4‚00‚000 13.5% Debentures (Convertible) 10‚00‚000 8‚00‚000 Mortgage Loan 3‚00‚000 2‚50‚000 Current Liabilities 8‚20‚000 9‚60‚000 49‚20‚000 53‚80‚000 You are informed that during 2010 (i) Rs. 2‚00‚000 of debentures were converted into shares at par; (ii) Rs. 1‚00‚000 shares were issued to a vendor of fixed assets; (iii) A machine costing Rs. 50‚000 book
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www.studyguide.pk for more notes visit www.studyguide.pk Bought to you by www.studyguide.pk AS- Level Accounting Unit 2 Revision Notes Benstead Revision Notes: Types of Business Organisation: Sole Traders: Advantages: Faster decision making Independence Quicker and cheaper to establish All profits belong to the sole trader Competitors know less about the business’s success as the accounts don’t have to be published Disadvantages: Unlimited liability-can lose both business’s
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unissued share capital of the company; (b) to write-off preliminary expenses of the company; (c) to write-off the expenses of‚ or commission paid‚ or discount allowed on any of the shares or debentures of the company; and (d) to pay premium on the redemption of preference shares or debentures of the company. Issue of Shares at a Discount There are instances when the shares of a company are issued at a discount‚ i.e. at an amount less than the nominal or par value of shares‚ the difference
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Chapter 7: Bonds and Their Valuation 1. If a firm raises capital by selling new bonds‚ it could be called the “issuing firm‚” and the coupon rate is generally set equal to the required rate on bonds of equal risk. a. True b. False ANSWER: True 2. A call provision gives bondholders the right to demand‚ or “call for‚” repayment of a bond. Typically‚ companies call bonds if interest rates rise and do not call them if interest rates decline. a. True b. False ANSWER: False 3. Sinking funds are
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| Project Report On Investment Options And Mutual funds| | By: Pawan JhawarMahendra KumarGaurav Singh| Investment Options A number of investment options are available for Mr. Yuvaraj. However‚ each of them carries some risk. 1. Fixed Income Instruments – These instruments deliver a committed rate of return to the investor. Due to the rate of return being fixed‚ fixed income instruments are low risk options. a.Public Provident Fund – PPF[->0] is a government backed long term scheme
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Business report Reef Adventures is a business that developed a package of cruising holidays on sailing ships around the Great Barrier Reef. In the establishment phase Reef Adventures concentrated on marketing these cruising holidays within Australia and New Zealand. As the business has grown steadily‚ the management has decided to market its product to potential customer‚ with a particular focus on Europe and the USA. Initially‚ considerable funds were needed to acquire ships and other equipment
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PROJECT REPORT ON “INVESTMENT AVENUES” INTRODUCTION ON VARIOUS INVESTMENT AVENUES INVESTMENTS The dictionary meaning of investment is to commit money in order to earn a financial return or to make use of the money for future benefits or advantages. People commit money to investments with an expectation to increase their future wealth by investing money to spend in future years. For example‚ if you invest Rs. 1000 today and earn 10 %over the next year‚ you will have Rs.1100 one year from today
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sources of finance that have been used by it. The cost of capital to a firm is the minimum rate of return that it must earn on its investments in order to satisfy the various catagories of investors who have made investments in the form of shares‚ debentures or term loans. Unless they company earns this minimum rate‚ the investors will be tempted to pull of the company. The optimum cost of capital is the financial break-even point. It represents a minimum rate of return. If the risk is involved
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