SP important questions for HSC Board Examination 2021
Fixed Capital |
Working Capital |
1. Meaning EANING |
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2. Purpose |
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3. Sources |
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4. Objective of Investor |
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5. Risk |
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6. Period of Capital Needs |
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7. Decision Meaking Authority |
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Equity Shares |
Preference Shares |
1. Meaning |
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2. Rate of dividend |
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3. Refund of capital |
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4. Nature of Capital |
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5. Nature of Investor |
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6. Convertibility
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7. Redeem ability |
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8. Voting Right
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9. Risk |
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Share |
Debenture |
1. Meaning: |
Debentures is an
acknowledgment of debt issued by a company under its common seal. |
2. Nature: |
Debenture capital is
borrowed capital and it is a temporary capital. |
3. Status |
Debenture capital is
borrowed /loan capital. a debenture holder is only a creditor of the company. |
4. Voting rights |
The debenture holder doesn't enjoy voting right. |
5. Return on
investment: |
Debenture holders
receive interest as a return on investment. |
6. Convertibility |
Debenture can be converted into shares. |
7. Security: |
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8. Types: |
The debenture is
classified as |
Transfer of Shares |
Transmission of Shares |
1. Meaning: |
Transmission of
shares refers to the transfer of ownership to his legal representative
because of the operation of law at the time of death or insolvency, etc. of
the members. |
2. When done: |
Transmission of share
is done when the member dies or becomes insolvent or insane. |
3. Nature of Action |
It is an involuntary
action due to Insolvency or death, etc. It is due to the operation of
law. |
4. Parties involved |
One party involved in transmission
of share i.e. legal or personal representative, the nominee of the member
just in case of death or insolvency. |
5. Instrument of transfer: |
Transmission of
shares does not requires Instrument. |
6. Initiated by |
The legal representative
initiates the process of transmission. |
7. Consideration |
No consideration is
involved here. The person who is entitled (legal representative) or official
receiver need not pay for the shares. |
8. Liability |
Original liability of shares continues to exist
just in case of transmission of shares. |
9. Stamp Duty |
In the case of
Transmission of share, No need to pay. |
Interim Dividend |
Final Dividend |
1. Meaning: |
Final dividend is that the dividend that's
declared in Annual General Meetings (AGMs) and paid annually after the close
of the financial year. |
2. Who Declares: |
It is decided and
recommended by the Board of Directors in the Annual General Meeting and
declared by the shareholders in the AGM (Annual General Meetings). |
3. Authorization |
It is declaration
does not need authorization by the Articles of Association. |
4. When Declared |
It is declared at the
Annual General Meeting of the company |
5. Rate of Dividend |
The rate of the final dividend is
always higher than the Interim Dividend. |
6. Source |
It is declared from
different sources like; current year’s profits, free reserves, capital
profits, Money provided by Govt. for dividend, etc. |
7. Accounting Aspect |
It is declared only
after the accounts of the year are prepared and finalized. |
Money Market |
Capital Market |
1. Meaning: |
It
is a component of the financial market where long-term borrowings take place. |
2. Time period |
In the capital market, the instruments traded have a maturity period of
more than one year. |
3. Instruments |
Stocks,
Shares, Debentures, Bonds, Securities of the government are the instrument of
the capital market. |
4. Purpose of borrowing |
Long
term funds are required to establish a new business, expand or diversify the
business, or purchase of fixed assets. |
5. Institutions |
Stock exchanges, Commercial banks, and
Non-bank institutions, financial intermediaries, etc. are the participants in
the market. |
6. Risk |
In
The capital market, the risk is more as compared to in the money market. The
reason behind this is the instruments have a long maturity period. |
7. Return on Investment |
Return
on investment in the capital market is comparatively high as they are
riskier. |
8. Role in Economy |
This market helps in the mobilization
of savings in the economy. |
Primary
Market |
Secondary Market |
1. Meaning: |
The securities issued earlier are traded in the secondary market. |
2. Mode of Investment |
Indirect investment as the securities are acquired from other stakeholders. |
3. Parties in action |
The parties dealing in this market are only investors. |
4. Intermediary |
The security brokers are the intermediaries. |
5. Value of security |
The price of the security is fluctuating, depending on the demand and supply conditions in the market. |
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thaks guru ji
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