Question

QUESTION 14

1. Large firms can obtain funds from which of the following?

   		Equity financing.
   		Issuing commercial paper.
   		Issuing long-bond bonds.
   		Loans from commercial banks.
   		All of the above.

6 points   

QUESTION 15

1. Banks rarely provide:

   		start-up capital loans.
   		mortgage loans.
   		automobile loans.
   		agricultural loans.
   		commercial loans.

Answer 1

Question 14)

Large firms can be related to those entities with large presence, high levels of turnover and profitability, its own brand in the market, Strong Balance Sheet. These firms have had an established identity and credibility in the market, which makes them easily accessible to the market for sourcing of the funds.

For any short term or long term or strategic requriements, these firms can choose different modes of financing which can be equity issue, or Bond issue or Short / Long term debts from commercial banks/financial institutions, issue of Commercial Papers, Preference stock etc;

Answer : All of the above

Question 15)

Unlike traditional times, in today's world, the banks are doing almost every financing activity apart from regular banking activities; As part of the same. issue of loans from various purposes depending on the requirement of the customers has become a tailor-made portfolio of the banks. The Banks have been issuing loans for personal purpose, commercial purpose, automobile, mortgage loans, agricultural and cattle based loans, etc; However, since the banking system is completely regulated by the Central bank, there are certain limitations in term of extending certain loans with high risk profiles; One such case is the new trend of Start-up loans; Banks are generally risk averse and are very rarely in a position to extend loans to start-ups; For start-ups, venture capital firms have been extending their support by providing equity infusion thru multiple series.

Answer: Start-up Capital Loans