Monday, September 8, 2008

A Session of Q/A

Mushtahir Aziz wrote: 

Sir what is 'Porishodhito' capital in share market. Suppose a new brokerage house has to pay 7.5 mil tk for its 1st 3 branches and 5 mil for each of the next ones as 'porishodhito' capital.what does it mean?

Dear Mushtahir:

The synonymous English phrase for 'Porishodhito Capital' is 'Paid-up Capital'. It is the amount that the owner(s) contribute(s) in the firm. In other words, it is the amount of capital that has been paid by the owner(s) of a firm or the shareholders of a corporation.

According to your example, the owner(s) must contribute (invest in the firm as equity capital)  7.5 mil tk to establish 1st 3 branches of a brokerage house and additional 5 mil for each additional branch.

Thanks.

1 comment:

Anonymous said...

Sir
I am student of FIN 254. Section 10. I am having a problem with question no 9, chapter 8.
How should I compute the last dividend that has 11% rate of return thereafter. Should I use the formula of zero growth rate? Then what is the amount in D (in the formula). Please help me out sir.