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.