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Essay on sources of finance

Essay on Sources of Finance. consists of the business having to put down security for the borrowing, which means that if the business runs into trouble then repayment. whereas capital for the acquisition of machinery may come from external sources. · An introduction to the different sources of finance. Some sources of finance are short term and must be paid back within a year. Other sources of finance are long term and can be paid back over many years.

essay on sources of finance Alternative Sources of Finance - EssaysWriters.com

BBC - GCSE Bitesize: Sources of finance

For example, if a company issues 10% loan stocky the coupon yield will be 10% of the nominal value of the stock, so that 0 of stock will receive interest each year. The rate quoted is the gross rate, before tax.

Debentures are a form of loan stock, legally defined as the written acknowledgement of a debt incurred by a company, normally containing provisions about the payment of interest and the eventual repayment of capital.

Debentures with a floating rate of interest

These are debentures for which the coupon rate of interest can be changed by the issuer, in accordance with changes in market rates of interest. They may be attractive to both lenders and borrowers when interest rates are volatile.


Loan stock and debentures will often be secured.


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