These shareholders have preferential right to get dividend and initial investment at the time of winding up the company. They get fixed dividend and they don’t have voting rights.Preference share are classified into following typesCumulative preference shares − They have right to claim dividends for years, which does not have ... Read More

Equity shareholders are real owners of the company and have control over the management. Liabilities of the equity shareholders is the value of unpaid value of shares. They can’t be redeemed during the life time of the company.Features of equity sharesFollowing are the features of equity shares −Maturity of the ... Read More

Security finance is also called corporate securities. In this, funds are mobilised through shares and debentures. These kinds of funds play an important role in capital structure of a company.Characters of security finance are as followsLong term source of finance.Corporate securities.Repayment of finance is very limited.Plays major role in capital ... Read More

Finance is the major part in running a firm. Distribution of finance to each and every department is based upon the requirements of that department and the situation of the business. Requirement of finance can be broadly classified into following −Long term or fixed capital financial requirement.Short-term or working capital ... Read More

Funds require to meet day to day operations are called short term finance. It is also called working capital. Temporary working capital is termed as short term. Some of them are as follows −Trade creditThe credit, which extended by manufacturer in producing its product is called trade credit. In this ... Read More

Long term financial requirement is also called as fixed capital requirement. It is the capital required to purchase fixed assets like building, furniture, land, plant and machinery etc. These are also called as long term financial requirements of a firm. Repayable period in long term is more than five years. ... Read More

The two main regulatory authorities are Securities Exchange Board of India (SEBI) and Reserve Bank of India (RBI).Given below are the regulatory compliance −Raising finance through IPO or SPO.Capital structure changes.Credit rating.Foreign exchange transactions.Derivative transactions.Project financing.Raising finance through IPO or SPOIPO − Initial public offering (first time company comes to ... Read More

Finance plays an important role in economic and business of a country. System and effective flow is needed for effective management used for business concern. Indian financial system has developed constantly to infuse the new blood to the economic development of the country.If a country has to be economically strong ... Read More

Payback period allude to the amount of time it takes to reach the cost of an investment. In simple terms, it is time taken for a firm to reach breakeven point.AdvantagesA short payback period can improve the liquidity of the business quickly.Shorter paybacks mean more attractive investments.Payback is easy to ... Read More

Profitability index (PI) measures the ratio between the present value of future cash flow and the initial investment. This is used for ranking investment projects and value created per unit of investment. PI is also known as profit investment ratio (PIR) or the value investment ratio (VIR).PI >1 (project generates ... Read More