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    Satabdi Chowdhury
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    This document discusses sources of long-term finance for businesses. It explains that businesses need long-term finance for activities like setting up new operations, expanding, diversifying, and modernizing. The sources of long-term finance discussed include equity capital, preference capital, term loans from banks/financial institutions, debenture capital, and unsecured loans. The document also covers other sources like internal accruals, leasing, hire purchase, government subsidies, and tax holidays. It introduces several new financial instruments and describes different ways that corporates can raise capital from primary markets like public issues, rights issues, private placements, bought-out deals, and Euro/ADR issues.

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    This document discusses sources of long-term finance for businesses. It explains that businesses need long-term finance for activities like setting up new operations, expanding, diversifying, and modernizing. The sources of long-term finance discussed include equity capital, preference capital, term loans from banks/financial institutions, debenture capital, and unsecured loans. The document also covers other sources like internal accruals, leasing, hire purchase, government subsidies, and tax holidays. It introduces several new financial instruments and describes different ways that corporates can raise capital from primary markets like public issues, rights issues, private placements, bought-out deals, and Euro/ADR issues.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    4 views2 pages

    M4 SLiM

    Uploaded by

    Satabdi Chowdhury
    This document discusses sources of long-term finance for businesses. It explains that businesses need long-term finance for activities like setting up new operations, expanding, diversifying, and modernizing. The sources of long-term finance discussed include equity capital, preference capital, term loans from banks/financial institutions, debenture capital, and unsecured loans. The document also covers other sources like internal accruals, leasing, hire purchase, government subsidies, and tax holidays. It introduces several new financial instruments and describes different ways that corporates can raise capital from primary markets like public issues, rights issues, private placements, bought-out deals, and Euro/ADR issues.

    Copyright:

    © All Rights Reserved
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    of 2

    Module 4

    Sources of Long term Finance


    Learning Outcomes:
     Explain how long-term financing is needed to maintain proper asset-liability
    management
     Analyze the various sources of long term finance to select an appropriate financing
    option
     Recognize the various types of issue of securities in primary market to comprehend
    the risk-return and capital appreciation benefits
     Explore the other forms of long term finance to enable selection of an appropriate
    source of finance

    WHY BUSINESS NEEDS LONG-TERM FINANCE?

     Setting up new firm Why Business


    needs long-term
     Expansion of business
    finance???
     Diversifications
     Modernizations
     Any other capital expenditure decisions

    SOURCES OF LONG-TERM FINANCE

    Term Loan from Banks/


    Equity Capital Preference Capital FIs /Debenture Capital/
    Unsecured Loans

    TYPES OF DEBENTURES

    Non-Convertible Debentures

    Fully Convertible Debentures

    Partly Convertible Debentures

    Secured Premium Notes


    OTHER SOURCES OF LONG-TERM FINANCE

    Government
    Internal Leasing and subsidies and
    Deferred Credit Venture Capital
    Accruals Hire Purchase Tax Holidays

    NEW FINANCIAL INSTRUMENTS

    NEW FINANCIAL INSTRUMENTS

    Non-Voting Shares Detachable Equity Warrants


    Participating Debentures Participating Preference Shares
    Convertible Debentures with Options Third Party Convertible Debentures
    Mortgage-Backed Securities Convertible Debentures Redeemable at Premium
    Debt-Equity Swaps Zero-Coupon Convertible Note

    CORPORATES RAISE CAPITAL FROM THE PRIMARY MARKET IN


    DIFFERENT WAYS

    Private Bought-Out- Euro/ADR


    Public Issue Rights Issue
    Placements Deals Issues

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