Question

U Ltd. has good growth prospects so it is planning to expand

their business for which it needs additional funds.

The finance manager reports that the company is not in a

position to bear extra burden of paying any fixed financial

charges like interest or dividend. They do not want to bear

any floatation cost. Also, the equity shareholders insist not to

issue further shares as there is risk of dilution of control.

(a.) Suggest the source of finance most suitable for U Ltd.

(b.) Give a name to the process of such a financing.

(c.) Explain the merits of financing through this source​

Answer 1

Answer:

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