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QUESTION SIX a)Debt finance is another source of long term capital for companies. (i)Discuss any three types of debt instruments that are available to companies.

QUESTION SIX

a)Debt finance is another source of long term capital for companies.

(i)Discuss any three types of debt instruments that are available to companies. (6 marks)

(ii)In relation to a company sourcing capital, discuss three benefits of using equity finance. (6 marks)

b)Your wealthy industrialist brother is trying to persuade your retired uncle to buy shares in Copperbelt Energy Limited? He himself owns a few thousand and is impressed by the steady rise in the price. Your uncle is skeptical because Copperbelt Energy pays out a very small dividend.Required:

(i)What arguments is your cousin likely to make to your uncle?(10 marks)

(ii)Are the arguments valid in this case?(3 marks)

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