Unit-2 Sources of finance and Capitalization
. Sources of Finance
Money is the lifeblood of any business, and it's essential for its smooth operation and growth. T...
Ownership securities
Ownership securities, also known as equity securities or equity investments, represent ownership ...
Equity shares
Equity shares, also known as ordinary shares, represent a form of ownership in a company. They ar...
Preference shares
Preference shares, also known as preferred shares, are a type of financial security issued by com...
Other shares
Deferred Shares Deferred shares are a type of shares that have no right to receive dividends eith...
Over trading Under trading
Aspect Over Trading Under Trading Definition A company engages in business activities beyo...
Debentures
A debenture is a document issued by a company that serves as a certificate acknowledging a debt. ...
Corporate Bonds
Corporate bonds are financial instruments issued by companies to raise capital for various purpos...
Other Bonds types
Zero Coupon Bonds/Zero Interest Bonds Zero coupon bonds, also known as zero interest bonds, are u...
Internal financing or ploughing back of profit
The Ploughing Back of Profits is a financial management strategy in which a company retains a por...
Loan financing
Loan financing is a common method of obtaining funds for individuals and businesses. Understandin...
Meaning of capitalization
Introduction The objective of every business is to maximize the value of the business. In this re...
Theories of capitalization
In the context of capitalization, there are two popular theories: Cost Theory and Earning Theory....
Over capitalization
Concept of Over-Capitalization: Over-Capitalization can be defined as the state of financial affa...
Under capitalization
Concept of Under-Capitalization: Under-Capitalization can be defined as a financial situation in ...
Watered stock
Watered stock refers to shares of a company that were issued at a much greater value than the val...