Issuing equity shares is a prerequisite to the creation of a company. When a company is formed it can issue shares to the public or to private individuals.

True. A detailed investigation of the company is done in regard to the company affairs, financial structure and also for the company’s security of assets. This makes it a bit hard in obtaining funds.

Trade credit facilitates easy purchase of supplies without immediate payment. Such credit appears in the records of the buyer of goods as accounts payable.

True. Payment of fixed rate of dividend to preference shares may enable a company to declare higher rates of dividend for the equity shareholders in good times.

True. The lessee never becomes the owner of the asset. He never reaps the benefits of ownership.

During the time of liquidation, preference shareholders have the right to receive their investment prior to equity shareholders.

True. Lease rentals paid by the lessee are deductible for computing taxable profits, and hence, lead to savings in taxes.

True. A commercial bank is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profits.

Interest on debentures is also called coupon rate. 

True. Each company has certain borrowing capacity. With the issue of debentures, the capacity of a company to further borrow funds reduces.