Capital Market Instruments

By Abhijeet Singh

What are Capital Instruments?

Capital InstrumentsAn instrument floated for

Sharing risk.

Preparing a strong capital structure.

Getting public funds and reducing the cost of capital.

Capital Instruments

Found in the Indian Market

● Equity Shares

● Preferential Shares

● Debentures

● Commercial Papers

● Long Term Loans

● Government Bonds

PropertiesThere are three basic characteristics associated with capital market instruments.

1. Risk2. Control3. Return

How does the choice of an capital instrument affects the capital decision?

What to choose?

Risk Control Return

Equity Shares High Low High

Preferential Shares Ok Ok Ok

Debentures Low High Low

A comparison of a few types of financial instruments.

Thank You!Bhiya RAM!!!