4. Sources Of Long-term Finance
• Shares
• Public Deposits
• Debentures
• Various Financial Institutions
5. “Shares”
• Shares are the most common
form of raising long term finance
from market (share market).
6.
7. Preference Shares
• These shares are those which are given
preference as regards to payment of
dividend and repayment of capital.
8.
9. Cumulative Preference Shares
• Unpaid Dividends which are carried
forward for subsequent years and
then paid off in full are called as
Cumulative Preference shares.
10. Non – Cumulative Preference
shares
• Those Shares which have right to
get fixed rate of dividend out of
the profits of the current year
only.
12. Non – Redeemable Preference
Shares
• Those shares which cannot be
redeemed or repaid during the
life time of the company.
13. Participative Preference Shares
• Those Preference share, which
have right to participate in any
surplus profit of the company
after paying the equity
shareholders.
14. Non – Participative Preference
Shares
• Preference shares, which have
no right to participate on the
surplus profit of the company.
15. Convertible Preference Shares
• Those Preference shares which
can be converted into Equity
Shares are called Convertible
Preference shares.
16. Non – Convertible Preference
Shares
• Preference shares, which are not
convertible into Equity shares are
called Non – Convertible Preference
Share.
17. Equity Shares
• These are the shares which do not enjoy
any preference regarding payment of
dividend and repayment of their capital.
18.
19.
20. Types of Equity Shares issued by
companies
• Blue Chip Shares
• Income Shares
• Growth Shares
• Cyclic Shares
• Defensive Shares
• Speculative Shares.
21. Blue Chip Shares
• These are the shares of some of the
companies which have been doing
extremely well in the past few years.
These are usually well established
Companies.
22. Income Shares
• These are the shares of the
companies which have stable
operations. The companies have
a high dividend payout ratio.
23. Growth shares
• These are the shares of companies which
have secured their positions in a
particular Industry. These shares have
less dividend payout ratio and hence high
growth potential.
24. Cyclical shares
• These are the shares of company
whose performance varies with
the stages of the cycle.
25. Defensive Shares
• These are the shares of the company
whose performance does change with
the changes in the economy.
26. Speculative shares
• These shares are the shares which
are traded in the company which
have a lot of speculations.