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to pay the value of the debt before maturity although in some instances companies may prefer to redeem them before maturity by buying them back in the market.

Venture Capital

It refers to participation by way of equality or co- financing through long term convertible debt in business. Venture capital means risk capital. This type of capital is sought to assisting product development, market research and acquisition of plant and equipment. Risk associates with this are venture capital involves control of management and planning of the business.

Leases

It's a form of lending which enables a firm to use an asset without owing it. The owner of the assets grants another party the right to use the asset usually for a specific period in return of a series of specific rental payments. The risk is that lessee is not the owner of the asset for which he cannot claim capital allowances.

Offer for sale

Offer for sales is method of issuing shares to the public, which have already been bought by an investor as a block. Therefore it's not considered as a primary issue but a secondary sale. A financial institution buys blocks of shares usually when the companies are formed and offer to the public at a later date.

Right Issue

Is a new issue of shares but subscription is limited to existing shareholders. Companies in need of additional capital usually go right issue unless the funds requirement is very large. The issue price will be determined usually at a level lower than the market price.

Cost of sources of finance and impact on financial statements (FS)
Capital structure decision is very significant since the question arises where her there is an optimal mix of capital and debt which a c company should try to achieve. If company is looking for obtaining debt Capital Company should earn enough profits to cover its interest charges before anything is available for equity. On the other hand if borrowed funds are invested in projects which provides return in excess of cost of debt capital, then the shareholders will enjoy the increased return on their equity. General cost of debt of each source as discussed in above is greater than the cost of equity financing. However tax savings can be enjoyed by the company in the cash of interest payments on debt financing. In the case of issuing shares to the public company has to incur considerable amount of expenses which are not tax deductible. As far as companies are concerned debt capital is potentially attractive sources of finance because interest charges reduce the profits chargeable only to corporate tax.

Shares can be issued to the public for the company whose shares are traded on the stock exchanges. In such case financial statements has to be complied with the IASs, listing rules and other regulations governing under the various institutions. Further format of financial statements for those companies are predetermined. But any company can obtain debt financing. In such case if the company is a quoted company, it has to be disclosed the financing sources and their cost and interest payments made during the period.

筹集资金的最佳方法-Best method of raising funds

Initial investment of ￡ 1 m for the new project can e obtained from the term loan as a source of debt finance.