Final answer:
To raise Rs. One crore urgently, a manufacturing company could either borrow from banks, considering the companies previous earning records, or issue corporate bonds.
Step-by-step explanation:
A manufacturing company needing funds due to a fire can consider several sources of raising funds. Early-stage investors can offer quick financial aid, but for a company with stability, reinvesting profits may be a viable source. However, due to the damage caused by the fire, the company may not have accessible profits and will likely look at borrowing options. Borrowing through banks or issuing bonds is often a suitable choice when immediate funds are required.
In the case of the company needing Rs. One crore, borrowing from banks can be a rapid solution. Banks typically lend to firms with credible revenue records, and the company can promise to repay the loan with interest. Another option, especially if the company is capable of making such interest payments, is to issue corporate bonds, which can also provide the necessary financial capital.
The most appropriate sources of raising funds for the manufacturing company would be:
Borrowing from banks: The company can borrow the needed funds from banks by providing collateral or using other financial instruments as security.
Issuing bonds: The company can issue bonds, which are debt securities, to raise funds from investors. By issuing bonds, the company agrees to repay the principal amount along with interest over a specified period of time.
Selling stock: The company can raise funds by selling shares of its ownership, also known as equity, to investors. This can be done through an initial public offering (IPO) or by offering shares to private investors.