Question : Case Study 21:
ABC Enterprises is a startup in the renewable energy sector aiming to raise funds for its innovative projects.
Question :
To fund its renewable energy projects, ABC Enterprises is considering issuing bonds. What type of financial instrument is this?
Option 1: Corporate bond
Option 2: Equity share
Option 3: Treasury bill
Option 4: Debenture
Correct Answer: Debenture
Solution : The correct answer is (d) Debenture
When ABC Enterprises considers issuing bonds to fund its renewable energy projects, the appropriate financial instrument is a debenture. A debenture is a type of long-term debt instrument issued by corporations or governments to raise capital. It is typically not secured by specific assets but rather by the general creditworthiness and reputation of the issuer.
In this scenario, considering ABC Enterprises is a startup seeking to fund its renewable energy projects, issuing debentures would be a suitable choice for securing long-term debt financing.
To fund its renewable energy projects, ABC Enterprises is considering
ABC Enterprises is looking to raise capital for its renewable energy projects.
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