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Long-Term Sources of Business Finance — Revision Notes

Telangana Open School (TOSS) · Class 12 · Business Studies

Long-Term Sources of Business Finance revision notes for Telangana Open School (TOSS) Class 12 Business Studies: 4 topics in quick points.

44 questions30 flashcards5 concepts

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Key Topics to Revise

1

Meaning and Need for Long-Term Finance

  • Long-term finance refers to funds used for more than one year and is also known as fixed capital.
  • It is essential for acquiring fixed assets like land, buildings, machinery, and equipment.
  • Used for major business activities such as expansion, modernization, mergers, and R&D.
2

Internal Source: Retained Earnings

  • Retained earnings are profits kept back in the business instead of being distributed as dividends.
  • Also called ploughing back of profits.
  • No cost of raising funds — no interest or repayment obligation.
3

External Sources: Equity Shares

  • Equity shares represent ownership in the company.
  • No fixed dividend — paid only when profits are available.
  • Dividend is not tax-deductible.
4

External Sources: Preference Shares

  • Preference shares carry preferential rights in dividend payment and capital repayment.
  • Fixed rate of dividend, but only if profits are available.
  • No voting rights under normal circumstances.

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Full Notes

Key Concepts

Funds required for more than oneProfits not distributed as dividends butEquity shares represent ownership with votingDebt instruments issued by companiesIncludes Global Depository Receipts (GDRs)

Frequently Asked Questions

What are the important topics in Long-Term Sources of Business Finance for Telangana Open School (TOSS) Class 12 Business Studies?
Key topics in Long-Term Sources of Business Finance include Meaning and Need for Long-Term Finance, Internal Source: Retained Earnings, External Sources: Equity Shares, External Sources: Preference Shares. Study these first, then practise questions on each for the Telangana Open School (TOSS) Class 12 board exam.
How should I revise Long-Term Sources of Business Finance for the Telangana Open School (TOSS) Class 12 board exam?
Learn the core ideas first, then work through the 44 practice questions on Long-Term Sources of Business Finance. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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All Telangana Open School (TOSS) Class 12 Business Studies Revision Notes

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