Issue of share capital
Sale of fixed assets
Issue of bonus shares
Share premium
Answer is Right!
Answer is Wrong!
The correct answer is C. Issue of bonus shares.
A source of funds is a way for a company to raise money. The four main sources of funds are:
- Issue of share capital: This is when a company sells new shares to investors.
- Sale of fixed assets: This is when a company sells non-current assets, such as land, buildings, or equipment.
- Borrowing: This is when a company takes out a loan from a bank or other lender.
- Retained earnings: This is when a company keeps some of its profits from one year to use in the next year.
Bonus shares are shares that are issued to existing shareholders without any additional payment. They are a way for companies to reward shareholders and increase their ownership stake in the company. However, bonus shares do not increase the company’s cash flow or assets, so they are not a source of funds.