Comparison between debt finance and ordinary share capital, Finance Basics

Comparison between Debt Finance and Ordinary Share Capital

Differences between Debt Finance and Ordinary Share Capital as Equity Finance as

 

Ordinary share capital

 

Debt

a)

b)

c)

d)

e)

f)

g)

h)

i)

It is a permanent finance

Return paid when available

Dividends are not tax allowable

Unsecured finance

Carry voting rights

Reduces gearing ratio

No legal obligation to pay

Has a residue claim

Owners' money

a)

b)

c)

d)

e)

f)

g)

h)

i)

It is refundable (redeemable)

It is fixed return capital

Interest on debt is a tax allowable expense

Secured finance

No voting right

Increases gearing ratio

A legal obligation to pay

Carries a superior claim

Creditors finance.

 

Posted Date: 1/29/2013 4:36:19 AM | Location : United States







Related Discussions:- Comparison between debt finance and ordinary share capital, Assignment Help, Ask Question on Comparison between debt finance and ordinary share capital, Get Answer, Expert's Help, Comparison between debt finance and ordinary share capital Discussions

Write discussion on Comparison between debt finance and ordinary share capital
Your posts are moderated
Related Questions
Struggling with your final year projects, terms paper writing, research paper writing, thesis writing, engineering and programming projects? Experts are available 24x7 to help you

For the set of activities shown in the table below, draw the total expenses vs. time curve using the following data: The labor rates are as follows: Labor # 1 (L1) rate = 30

A company that manufactures electrical appliances is looking at one of its lines (washing machines), where it offers three different levels of specification: Basic which sells for

Disadvantages of Overdraft Finance A. It is expensive as the interest rates of overdrafts are much higher than bank rates. B. The employ of this finance is an indication of

Agency Theory An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some

Zoeckler Mowing & Landscaping''s year-end 2012 balance sheet lists current assets of $436,500, fixed assets of $551,500, current liabilities of $417,900, and long-term debt of $317

Shareholders' wealth maximization - Objectives of Business Entity Shareholders' wealth maximization refers to maximization of the total present value of each decision made in

Problem: Cash Flow Analysis For the attached Gantt chart, the following information is available: Invoices are sent at the end of each month. Mark up is 20% on each invoi

•How did the stock market indices react to these changes? •How did long-term U.S. Treasury bond yields react to these changes? •What happens to borrowers, savers, investors, and