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Sources of Corporate Finance Quiz

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Questions and Answers

What are the two forms of owned capital mentioned in the text?

Public deposits and bonds
Equity shares and retained earnings (correct)
Debentures and preference shares
Trade credit and ADR / GDR

Which of the following is considered an external source of finance?

Equity shares
Trade credit
Retained earnings
Debentures (correct)

What is the difference between external and internal sources of finance?

External sources are always more reliable than internal sources.
External sources involve raising capital from outsiders, while internal sources involve obtaining capital from within the organization. (correct)
External sources involve trade credit, while internal sources involve equity shares.
External sources are related to retained earnings, while internal sources are related to debentures.

Which type of capital is raised by the company with the help of owners (shareholders)?

<p>Owned capital (D)</p> Signup and view all the answers

What form does owned capital take when shareholders purchase shares of the company and supply necessary capital?

<p>Equity shares (A)</p> Signup and view all the answers

Flashcards

Internal Sources of Finance

Capital raised from within the organization, not from external investors.

External Sources of Finance

Capital acquired from outside investors or lenders.

Owned Capital

Capital contributed by the owners or shareholders of a company.

Equity Shares

Shares representing ownership in a company, purchased by shareholders to provide capital.

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Retained Earnings

Profits that a company reinvests back into the business instead of distributing them as dividends.