INSTRUMENTS OF

CAPITAL MARKET
BY:- MRUNMAYEE KULKARNI.
 EQUITY SHARES
• ACCORDING TO COMPANIES ACT 2013, EQUITY SHARES
ARE THAT PART OF THE SHARE CAPITAL OF THE
COMPANY,WHICH ARE NOT PART OF PREFERENCE SHARE .

• EQUITY SHAREHOLDERS ARE THE REAL OWNER OF THE

COMPANY.

• THE RETURNS ON EQUITY SHARE IS DIVIDEND.

 MERITS AND DEMERITS OF
EQUITY 

MERITS OF EQUITY DEMERITS OF EQUITY

•  A PERMANENT SOURCE OF • NO GUARANTEE ON RETURNS
FINANCE TO THE COMPANY  TO SHAREHOLDERS
• NO FIXED RATE OF DIVIDEND • LOSS OF MANAGERIAL
• EASY LIQUIDITY   CONTROL
 PREFERENCE SHARES

• PREFERANCE SHARE ARE KNOWN AS PREFERRED STOCK .

• PREFERANCE SHARE CAPITAL HAS TWO PRIORITIES
                       -  REPAYMENT OF CAPITAL
                       -  PAYMENT OF DIVIDEND 
• PREFERANCE SHARE HAVE NO VOTING RIGHT 
 TYPES OF PREFERANCE SHARE 

CONVERSTION • Convertible preference  shares

  • Non-convertiable preference shares 

• Redeemable preference shares

REDEMPTION • Irredeemable preference shares

• Cumulative preference shares

DIVIDEND • Non-cumulative preference shares
MERITS AND DEMERITS OF PREFRENCE SHARES 

MERITS FROM COMPANY DEMERITS FROM INVESTER

POINT OF VIEW POINT OF VIEW

• ABSENCE OF VOTING RIGHTS • NOT SECURED

• NO DILUTION OF CONTROL • NOT AN ATTRACTIVE
• FIXED RETURN INVESTMENT
 DEBENTURES

• WHEN A CORPORATION IS IN NEED OF FUND IN ADDITION

TO SHARE CAPITAL IT BORROWING MONEY BY ISSUING
DEBENTURES

• DEBENTURE HOLDERS GET INTEREST WHICH IS FIX AS THE

TIME OF ISSUE
 TYPES OF DEBENTURES

• Redeemable debentures
REDEMPTION  • Irredeemable debentures 

• Convertible debentures
CONVERSITION • Non - Convertible debentures

• Secured Debentures
SECURITY • Unsecured Debentures
 MERITS AND DEMERITS OF
DEBENTURES
MERITS DEMERITS

•A FLEXIBLE SOURCE OF FINANCE • FIXED RATE OF INCOME

•REDUCED BURDEN OF TAX • NOT AN ATTRACTIVE
INVESTMENT
 BONDS

• BONDS ARE ISSUED BY PUBLIC AUTHORITIES , CREDIT

INSTITUTION AND COMPANIES

• MOST COMMON PROCESS OF ISSUING BOND IS

UNDERWRITTEN
 TYPES OF BONDS

• REGISTERED BONDS 
• CONVERTIBLE BONDS
• ZERO COUPON BONDS
• FIXED RATE BONDS
THANK YOU