Tugas personal ke-2

(Minggu 2)
1. Explain 3 external sources of fund that firms can obtain?
A company might raise new funds from the following sources:
- The capital markets:
a. new share issues, for example, by companies acquiring a stock market listing for
the first time
b. rights issues
-

Loan stock
Loan stock is long-term debt capital raised by a company for which interest is paid,
usually half yearly and at a fixed rate. Holders of loan stock are therefore long-term
creditors of the company.

Retained earnings
For any company, the amount of earnings retained within the business has a direct
impact on the amount of dividends. Profit re-invested as retained earnings is profit
that could have been paid as a dividend.

Bank borrowing
Borrowings from banks are an important source of finance to companies. Bank
lending is still mainly short term, although medium-term lending is quite common
these days.

Government sources
The government provides finance to companies in cash grants and other forms of
direct assistance, as part of its policy of helping to develop the national economy,
especially in high technology industries and in areas of high unemployment.

Venture capital
Venture capital is money put into an enterprise which may all be lost if the enterprise
fails. A businessman starting up a new business will invest venture capital of his own,
but he will probably need extra funding from a source other than his own pocket.
However, the term 'venture capital' is more specifically associated with putting
money, usually in return for an equity stake, into a new business, a management buyout or a major expansion scheme.

Franchising.
Franchising is a method of expanding business on less capital than would otherwise
be needed. For suitable businesses, it is an alternative to raising extra capital for
growth.

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2. Explain the difference between money market and capital market and also give examples
the instruments of money market and capital market that traded in Indonesia.
Basically the difference between the capital markets and money markets is that capital
markets are for long term investments, companies are selling stocks and bonds in order to
borrow money from their investors to improve their company or to purchase assets.
Whereas money markets are more of a short term borrowing or lending market where
banks borrow and lend between each other, as well as finance companies and everything
that is borrowed is usually paid back within thirteen months.
Another difference between the two markets is what is being used to do the borrowing or
lending. In the capital markets the most common thing used is stocks and bonds, whereas
with the money markets the most common things used are commercial paper and
certificates of deposits.
Example of Capital Market :
-

Indonesia Stock Exchange

PT. Kliring Penjaminan Efek Indonesia (PT. KPEI)
PT. Kustodian Sentral Efek Indonesia (PT. KSEI)
etc

Example of Money Market :

- Bank (BI, BRI, BNI, etc)
- BPJS Ketenagakerjaan
- Insurance (Bumi Putra, Prudential, etc)
- Government institutions
- Financial institutions
- etc

0144A Manajemen Keuangan