What is meant by security financing-what is debt financing

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Mpulungu boat operators Limited are considering investing in a new boat for their fleet. The company can either borrow the necessary funds from its bank at 4% and purchase the boat, or enter into a finance lease involving five annual year end payments of $12, 000, The new boat costs $45, 000, and would attract capital allowances at 25% on straight line basis over its five year life for its owners. Company tax is 30% payable in the year of the relevant profits. Required: Based on the case study above give and explain in detail. 1. The various sources of financing. 2. What is meant by security financing? 3. What is debt financing? 4. Critically examine the advantages and disadvantages of equity shares. 5. Discuss the features of equity shares.

Reference no: EM131928074

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