Financial Management

27

Traditional Financial Instruments

“A long-term investment is a short-term investment that performs badly.”

LEARNING OBJECTIVES

After reading this chapter, you will be able to:

1. Understand the concept and rationale of equity capital and preference capital.

2. Discuss debentures and bonds.

3. Look at depository receipts.

4. Understand the concept of foreign bonds and Eurobonds.

5. Discuss leasing, equipment financing, etc.

FINANCE IN PRACTICE

All equity owners enjoy equal voting rights, but only a few exercise it. A majority of retail investors trade with shares and look for capital gain. Experts say that equity can be classified into voting equity and nonvoting equity. Voting equity should have more value relative to nonvoting equity. Tata Motors ...