CUET Preparation Today
When the stock market is bearish, a company may depend upon which of the following in order to raise the required funds? |
Equity Shares Debentures Preference Shares Any of the above |
Debentures |
The correct answer is option 2- Debentures. When the stock market is bearish, a company may depend upon debentures in order to raise the required funds. Health of the capital market may affect the choice of source of fund. During the period when stock market is rising, more people invest in equity. However, depressed capital market may make issue of equity shares difficult for any company. Thus, in a bearish market, the company may raise fund through the issue of debentures. |
