Read the following passage and answer the question.

MAM is renowned multiplex operator in India. It own around 500 screens in 100 properties at 90 locations in the country. Considering the fact that there is more growing trend among the people to spend more of their disposable income on entertainment, company planned to add more screen at existing locations and start at new locations also. Further, they plan to add food chain also at their locations. The company planned to float equity shares in market to raise the desired capital. The issue was fully subscribed and paid. Over the year, the sale and the profit of the company have increased tremendously and it has been declaring higher dividend and the market price of its share has increased manifolds.

"The company planned to float equity shares in market to raise the desired capital."

Which capital requirement is highlighted in the given line?

Fixed capital

The correct answer is option 1- Fixed capital.

The capital requirement highlighted in the line "The company planned to float equity shares in the market to raise the desired capital" refers to the need for funds to invest in fixed assets.

Fixed Capital refers to the funds required for acquiring and maintaining fixed assets, such as property, buildings, machinery, and equipment. These assets are essential for the company’s long-term operations and expansion. Here, MAM plans to expand by adding more screens, starting new locations, and incorporating food chains. These activities involve significant investment in fixed assets, such as new theater screens, properties, and possibly facilities for the food chains. Floating equity shares is a method to raise capital specifically to meet such long-term investment needs. This form of financing helps cover the costs associated with acquiring and upgrading fixed assets, which are crucial for the company's growth and expansion plans.