Explain five sources of finance that are available to a Public Limited Company.
Explanation
Sources of finance that are available to a public limited company are: (i)Loan and overdrafts from Banks: Loans can be obtained from commercial or development banks. (ii) Sales of shares: It can obtain funds from the public by issuing shares. (iii) Sales of debentures: These are long term loans obtained from the general public at a fixed interest. (iv) Bill of exchange: This is a document duly signed by the debtor's bank to the creditor and the creditor cashes the money with some discounts. (v) Equipment leasing: Equipment can be leased out by companies for money. (vi) Retained (ploughed back) profits: The profits made by the company can be set aside for re-investment (vii) Trade credit: Raw materials can be purchased by the company on credit. (viii) Hire purchase: Facilities can be granted to company to buy and pay on installment.