Commerce Exam > Commerce Questions > Krishna Ltd. is manufacturing steel at its pl...
Start Learning for Free
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain.
? Related: Chapter Class - Financial Management
Most Upvoted Answer
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to econ...
Financial Planning for Krishna Ltd.
Financial planning is crucial for Krishna Ltd. as it helps in determining the financial goals, identifying the sources of funds, and allocating the resources effectively. It enables the company to plan for the future and ensure the availability of funds for various activities, including expansion, investment, and working capital.
Capital Structure of Krishna Ltd.
The capital structure of Krishna Ltd. refers to the mix of different sources of funds used to finance the company's operations. In this case, the capital structure includes the following:
- Debentures: Rs. 300 crore
- Long-term loan from banks: Rs. 200 crore
- Equity share issue to the public: Rs. 200 crore
- Reserves and surplus: Remaining amount
The company has a diversified capital structure, with a mix of debt and equity financing. This helps in reducing the financial risk and ensuring the availability of funds at a reasonable cost.
Financial Decision Involved
The decision to raise Rs. 800 crore from different sources involves several financial decisions, including:
- Determining the appropriate mix of debt and equity financing
- Identifying the sources of funds and evaluating their cost and availability
- Assessing the financial risk and ensuring the financial stability of the company
- Planning for the repayment of debt and the payment of dividends to shareholders
Payment of Dividend in Krishna Ltd.
The payment of dividend in Krishna Ltd. will be affected by the decision to raise funds from different sources. The company will have to allocate a portion of its profits for the payment of interest and principal on the debt raised from debentures and long-term loans. This may reduce the amount available for the payment of dividends to shareholders. However, the equity share issue may help in increasing the equity base of the company, which may lead to higher profits and dividends in the long run.
Financial planning is crucial for Krishna Ltd. as it helps in determining the financial goals, identifying the sources of funds, and allocating the resources effectively. It enables the company to plan for the future and ensure the availability of funds for various activities, including expansion, investment, and working capital.
Capital Structure of Krishna Ltd.
The capital structure of Krishna Ltd. refers to the mix of different sources of funds used to finance the company's operations. In this case, the capital structure includes the following:
- Debentures: Rs. 300 crore
- Long-term loan from banks: Rs. 200 crore
- Equity share issue to the public: Rs. 200 crore
- Reserves and surplus: Remaining amount
The company has a diversified capital structure, with a mix of debt and equity financing. This helps in reducing the financial risk and ensuring the availability of funds at a reasonable cost.
Financial Decision Involved
The decision to raise Rs. 800 crore from different sources involves several financial decisions, including:
- Determining the appropriate mix of debt and equity financing
- Identifying the sources of funds and evaluating their cost and availability
- Assessing the financial risk and ensuring the financial stability of the company
- Planning for the repayment of debt and the payment of dividends to shareholders
Payment of Dividend in Krishna Ltd.
The payment of dividend in Krishna Ltd. will be affected by the decision to raise funds from different sources. The company will have to allocate a portion of its profits for the payment of interest and principal on the debt raised from debentures and long-term loans. This may reduce the amount available for the payment of dividends to shareholders. However, the equity share issue may help in increasing the equity base of the company, which may lead to higher profits and dividends in the long run.
Community Answer
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to econ...
Answer of 4. dividend affect as because company pay more interest on taking debentures and after it company pay 30% of coperate tax it lowered the dividend or EPS
answer of 1. the importance of financial planning of company according to
1. link of persent investment with future financing
2. Making proper utilisation of fund
answer of 3. company have invest in long term financing or invest in his fixed assets like steel plant. So this indicates toward investment decision or capital budgeting decision
answer of 2. the captial structure of is = 62.34 % of dept from total captial structure and Equity = 37.66 percent of total captial structure
answer of 1. the importance of financial planning of company according to
1. link of persent investment with future financing
2. Making proper utilisation of fund
answer of 3. company have invest in long term financing or invest in his fixed assets like steel plant. So this indicates toward investment decision or capital budgeting decision
answer of 2. the captial structure of is = 62.34 % of dept from total captial structure and Equity = 37.66 percent of total captial structure
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management?
Question Description
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management?.
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management?.
Solutions for Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? defined & explained in the simplest way possible. Besides giving the explanation of
Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management?, a detailed solution for Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? has been provided alongside types of Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? theory, EduRev gives you an
ample number of questions to practice Krishna Ltd. is manufacturing steel at its plant at Noida. Due to economic growth, the demand for steel is also growing. The company is planning to set up a new steel plant at Gurgaon. It needs Rs. 800 crore to start the new plant. It decides to raise Rs. 300 crore through debentures, Rs. 200 crore through long-term loan from banks and Rs. 200 crore by issue of equity share to the public. It decided to finance the remaining amount by utilizing itsreserves and surplus.1. State the importance of financial planning for this company.2. What is the capital structure of this company? Explain.3. Identify the financial decision involved when the company decides to raise Rs. 800 crore from different sources of funds.4. How will the payment of dividend in Krishna Ltd. be affected? Explain. Related: Chapter Class - Financial Management? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup