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Question : Case Study 21:

ABC Enterprises is a startup in the renewable energy sector aiming to raise funds for its innovative projects.

Question : 

To fund its renewable energy projects, ABC Enterprises is considering issuing bonds. What type of financial instrument is this?

Option 1: Corporate bond
 

Option 2: Equity share
 

Option 3: Treasury bill

 

Option 4: Debenture


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

Correct Answer: Debenture


Solution : The correct answer is (d) Debenture

When ABC Enterprises considers issuing bonds to fund its renewable energy projects, the appropriate financial instrument is a debenture. A debenture is a type of long-term debt instrument issued by corporations or governments to raise capital. It is typically not secured by specific assets but rather by the general creditworthiness and reputation of the issuer.

In this scenario, considering ABC Enterprises is a startup seeking to fund its renewable energy projects, issuing debentures would be a suitable choice for securing long-term debt financing.

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