Question

a company wants to set up a new branch in Chennai. for additional capital company is planning to issue equity shares to public as there is a boom period in capital market and public will prefer to invest in shares. while analysing the issue, finance manager found that floatation cost of the issued would be higher and company is already in liquidity crunch. company deemed it proper to depend on money market instruments for about six months.
1. identify the method of floatation of capital, mentioned above.
2. besides above feared issue method, mention two other methods.
3. use of water kind of instrument will be appropriate for the money market. clarify.​

Answer 1

Answer:

for additional capital company is planning to issue equity shares to public as there is a boom period in capital market and public will prefer to invest in shares. while analysing the issue, finance manager found that floatation cost of the issued would be higher and company is already in liquidity crunch. company deemed it proper to depend on money market instruments for about six months.

1. identify the method of floatation of capital, mentioned above.

2. besides above feared issue method, mention two other methods.

Answer 2

Answer:

1 IPO

2 offer for sale ,private placement

3 commerical paper