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Debenture stamp duty is a state subject and the duty varies from state to state.
There are two kinds of stamp duties levied on debentures viz issuance and transfer.
Issuance stamp duty is paid in the state where the principal mortgage deed is
registered. Over the years, issuance stamp duties have been coming down. Stamp
duty on transfer is paid to the state in which the registered office of the company is
located. Transfer stamp duty remains high in many states and is probably the
biggest deterrent for trading in debentures in physical segment, resulting in lack of
liquidity.
On issuance, stamp duty is linked to mortgage creation, wherever applicable while
on transfer, it is levied in accordance with the laws of the state in which the
registered office of the company in question is located. A debenture transfer, has
to be effected through a transfer form prescribed for under Companies Act.
Issuance of stamp duty on bonds is under Indian Stamp Act 1899 (Central Act). A
bond is transferable by endorsement and delive without payment of any transfer
stamp duty.
First, a firm may divest (sell) businesses that are not part of its core operations so that it
can focus on what it does best. For example, Eastman Kodak, Ford Motor Company, and
many other firms have sold various businesses that were not closely related to their core
businesses.
A second motive for divestitures is to obtain funds. Divestitures generate funds for the
firm because it is selling one of its businesses in exchange for cash. For example, CSX
Corporation made divestitures to focus on its core railroad business and also to obtain
funds so that it could pay off some of its existing debt.
A third motive for divesting is that a firm's "break-up" value is sometimes believed to be
greater than the value of the firm as a whole. In other words, the sum of a firm's
individual asset liquidation values exceeds the market value of the firm's combined
assets. This encourages firms to sell off what would be worth more when liquidated than
when retained.
A fourth motive to divest a part of a firm may be to create stability. Philips, for example,
divested its chip division called NXP because the chip market was so volatile and
unpredictable that NXP was responsible for the majority of Philips's stock fluctuations
while it represented only a very small part of Philips NV.
A fifth motive for firms to divest a part of the company is that a division is
underperforming or even failing.
The equity capital market is an important part of the capital market. In this market,
companies and financial institutions raise funds and provide equities using the
shares of their own businesses. Investors invest in the company by purchasing the
shares or equities.
Company stocks are the prime financial instrument of the equity capital market.
This instrument is provided and maintained by the companies or the financial
institutions themselves.
The equity capital market and the debt capital market together form the
capital market. The primary difference between the equity capital and debt
capital markets is the amount of risk and return related to them. The equity
capital market is known for its huge returns and its high risks. On the other
hand, the debt capital market is far more secure than the equity market but
the returns are low.
5. A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or
"bootstrap" transaction) occurs when a financial sponsor acquires a
controlling interest in a company's equity and where a significant
percentage of the purchase price is financed through leverage (borrowing).
Savings accounts are offered by commercial banks, savings and loan associations,
credit unions, building societies and mutual savings banks.