(a) Write the main features of Bulldog Bond. (b) What do you understand by Spontaneous Sources of finance and explain its sources of finance? (c)…

(a) Features of Bulldog Bond It is denominated in Bulldog Pound Sterling/Great Britain Pound (GBP)Issued in LondonIssuer Non- UK CompanyRegulations: Great BritainPurpose: Access of capital available in UK marketIssue proceeds can be used to fund UK operationIssue proceeds can be used to fund a company's local opportunities (b) Spontaneous sources of finance are those which naturally arise in the course of business operations. Trade credit, credit from employees, credit from suppliers of services, etc. are some of the examples which may be quoted in this respect. Trade Credit: Trade credit is a spontaneous source of finance which is normally extended to the purchaser organization by the sellers or services providers. It contributes to about one-third of the total short-term requirements. Bills Payable: In the case of "Bills Payable” the purchaser will have to give a written promise to pay the amount of the bill/invoice either on demand or at a fixed future date to the seller or the bearer of the note. Accrued Expenses: The accrued expenses refer to the services availed by the firm, but the payment for which has yet to be made. It is a built in and an automatic source of finance as most of the services like wages, salaries, taxes, duties etc., are paid at the end of the period. (c) Over-capitalisation arises due to following reasons: Raising more money through issue of shares or debentures than company can employ profitably.Borrowing huge amount at higher rate than rate at which company can earn.Excessive payment for the acquisition of fictitious assets such as goodwill etc.Improper provision for depreciation, replacement of assets and distribution of dividends at a higher rate.Wrong estimation of earnings and capitalization (d) Disadvantages of Profit Maximisation objective of financial management. Emphasizes the short-term gainsIgnores risk or uncertaintyIgnores the timing of returnsRequires immediate resources.