Radhika limited has good growth prospects so in this planning to expand their business for this the company 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 dividends they do not want to bear any flotation cost even also the the equity shareholders insist not to issue further shares as there is risk of dilution of control, suggest and explain the source of finance most suitable for Radhika limited

Dear Student,
Debentures would be the most suitable source of finance for Radhika Ltd.
​​​​​​As, debentures do not carry voting rights, financing through debentures does not dilute control of equity shareholders on management. Debentures represents the loan capital of a company and the holders of debentures are the creditors. They are fixed charged funds that carry a fixed rate of interest.

Regards

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