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Posted by Rawat Singh 5 years, 9 months ago
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Yogita Ingle 5 years, 9 months ago
Debentures are the acknowledgement of debt taken by a company from the public for a fixed period of time at a given rate of interest.
Debentures give following benefits/merits:
(a) Low cost : the cost of raising debentures is less than the cost of raising preference shares or equity shares. It is a cheaper source of finance. -
(b) No dilution of control : Debenture holders do not get any voting rights. They are not allowed to participate in decision making. Thus do not dilute the control of equity shareholders.
(c)Tax benefit for the company : The interest paid to debenture holders is considered as an expense of the company so the liabiltiy of tax reduces and the company gets tax benefits issuing debentures.
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Yogita Ingle 5 years, 9 months ago
Joint Ventures can be with a company of same industry or can be of some other industry, but with a combination of both, they will generate a competitive advantage over other players in the market.
Benefits of joint ventures are :
1.Reduces competition : When two companies join together, it results in reducing the competition as instead of wasting resources in competition they will strengthen their organisation.
2.Reduces risk : High risk involved in new and innovative ventures can be reduced when two companies join together to share the risk.
3.Advanced technology : By joining hands with foreign companies, Indian companies can get the benefit of advanced technology.
4.Large capital : In joint ventures, two companies together contribute capital. As a result, large capital can be arranged without much difficulty.
5.Reduction in cost: When two firms join together, they can operate on a large scale and get the benefit of economies of scale hence reduces cost of production and marketing.
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Yogita Ingle 5 years, 9 months ago
A lease can be defined as a contractual agreement wherein one party i.e., the owner of an asset bestows the other party the right to use the asset in return for a periodic payment. It is otherwise called a process of leasing an asset for some specified period. The owner of the asset is called as the 'lessor' and the party that makes use of the asset is called as the 'lessee' (see Box A). The lessee pays a fixed periodic amount called lease rental to the lessor for the use of the asset. The terms and conditions that bound the lease arrangements are mentioned in the lease contract. During the end of the lease period, the asset is returned to the lessor. Lease finance paves way for an important means of modernisation and diversification to the organization. This type of financing is more rampant in the acquisition of such assets as computers and electronic equipment that become obsolete quicker due to the fast changing technological developments. In the process of making the leasing decision, the cost of leasing an asset should be compared with the cost of owning the same.
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Harsh Panchal 5 years, 9 months ago
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