Tag: source
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Sources of fund
Determining appropriate sources of funds Several factors are to be considered: The required money Gearing ratio Purpose of the fund Size of the business Determining appropriate sources of funds The required money If a large amount of money is required the business will opt for long term loan and equity rather than overdraft…
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Debt capital compared to owner’s fund
Impact of debt capital compared to owners fund In debt capital the following happens The ownership does not change The money has to be returned Interest has to be paid to the lenders
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External sources of funds
External sources of funds Loan Debentures Shares Overdraft