The provisions relating to a debenture are laid down in a trust deed, and a trustee is appointed to act on behalf of the debenture holders.
Traditional bank overdraft A bank overdraft gives a business the right to borrow up to a predetermined limit for an agreed period of time (Eiteman et al, 2013). Bank overdrafts represent a flexible approach to short-and medium-term financing as interest is paid only on the amount borrowed. Bank overdrafts are usually an expensive form of debt financing, but the cost will vary with the credit rating of the business arranging the facility (Eiteman, et al, 2013).
Working capital term loan It is an agreement to borrow a specific amount of money for a specific period of time at an agreed rate of interest (Eiteman et al, 2013). Security for the loan is usually provided by a fixed charge over an asset. The loan is repayable over a fixed period and the repayment pattern can vary from lender to lender …show more content…
Most of the capital raised by organizations has a cost that is either explicit, such as the interest payments on debt, or implicit, such as the opportunity cost associated with equity capital (Bertomeu, 2015). Majority of companies will combine both equity and debt methods to finance their businesses (Kotabe, & Zhao, 2002). In the global equity markets, stock is traded by publicly owned foreign corporations and cross listing is a common occurrence. Cross listing is when stock is offered on one or more foreign exchanges in addition to the domestic stock exchange (Dodd, 2013). Cross-listing expands your investor base among different countries and types of economies (Dodd, 2013). An increase in demand for your stock keeps the price of your shares at a higher level than if they were concentrated in only your home market (Dodd,