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Question : Case Study: XYZ Ltd. - Raising Finance for Expansion

XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.

Questions : Different Sources of Business Finance

Which source of business finance involves raising funds by issuing ownership shares?

 

Option 1: Debentures
  

Option 2: Retained earnings
   

Option 3: Equity shares

 

Option 4: GDRs


Team Careers360 19th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Equity shares


Solution : The correct answer is (c) Equity shares

Equity shares represent ownership in a company and provide ownership rights and claims on the company's assets and earnings. When a company issues equity shares, it is essentially selling ownership stakes to investors, allowing them to become shareholders and participate in the company's growth and success. This is a common way for companies to raise funds for their operations, expansions, or other financial needs.

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