Finance Numericals

Debenture: It is a loan certificate which  is issued by company to the general public. The debenture holders have a right to get interest on it. It is not a secured loan. Bond: It is similar to debenture, but it acts as a secured loan issued by government and big corporations. The interest rates are low, but paid before the debentures.                                                                                       Bond Yield at Maturity: The bond holders can ascertain how much amount they earn on their investments annually. Formula: (Annual Interest + [(par value-market value)/number of years of maturity]/ ((par value+ market value) / 2) Types of debentures: Convertible debenture A debenture which can be convertible into equity shares. Non-convertible debenture A debenture which cannot be converted into equity shares. Registered debenture Only registered debenture holders get interest amount and principal amount

Preference Share Capital:   Those shares which do not provide voting right in a company but give fixed dividend and at the time of liquidation the holder of these shares get their fixed dividend before equity share holders is called preference Share Capital. Types of Preference Share Capital: Convertible Preference Share A share which converts from preference shares to equity. Non-Convertible Preference Share A share doesn’t have a quality of conversion from preference shares to equity. Cumulative Preference Share The holders have a right to get any previous arrears dividend with current dividend if company has enough profit. Non-Cumulative Preference Share The holders don’t have a right to get any arrears dividend with current dividend. Participating Preference Share The shareholders have a right to participate in surplus profit after paid to ordinary share holders.

Equity Capital / Share Capital : The fund is required to start a business which is known as Capital. The Capital is divided into small units and each unit is called share or equity. ·            The shares give the voting right to the share holders in a company. The shareholder has a right to select a person who represents them in a board meeting of a company. ·            Types of Shares: Authorised  Share Capital It is a maximum share capital which a company can issue to investors or public. Issued Share Capital It is a part of authorized capital which is actually issued to the general public. Subscribed Share Capital It is a part of issued share capital which is subscribed by a public. Paid-up Share Capital An amount receives by company through investors in response of giving Company shares to them. Right Issue Share A company issues additional shares to the existing shareholders for spe