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262 Corporate Finance BRILLIANT’S

(B) Advantages to the share holders (B) eo¶ahmoëS>g© Ho$ {bE bm^
1. Increase in the value of shares: A com- 1. eo¶g© Ho$ ‘yë¶ ‘| d¥{Õ… EH$ H§$nZr Omo bm^
pany which earns profits and reinvests a part A{O©V H$aVr h¡ VWm BgHo$ EH$ ^mJ H$mo nwZ{Z©doe H$aVr h¡
of it into business every year is considered a Cgo pñWa H§$nZr ‘mZm OmVm h¡& ¶h AÀN>m Zm‘ H$‘mVr h¡&
stable company. It earns a good name. As such
the value of its shares rises in the share mar- AV… BgHo$ eo¶g© H$m ‘yë¶ eo¶a ‘mH}$Q> ‘| ~‹T>Vm h¡&
ket.
2. Increase in earning capacity: The re- 2. A{ZªJ j‘Vm ‘| >d¥{Õ… ì¶mnma ‘| [aQ>|S> A{Zª½g
tained earnings in the business helps the com- H§$nZr H$mo {dH$mg H$aZo ‘| ghm¶Vm H$aVr h¢& ¶h g§ñWm
pany to grow. It increases the earning capacity
H$s A{ZªJ j‘Vm H$mo ~‹T>mVr h¡&
of the concern.
3. Retaining the control: A self financing 3. {Z¶§ÌU nmZm… EH$ goë’$ ’$m¶Z|qgJ H§$nZr H$mo
company need not issue new shares for its fu- BgH$s ^{dî¶ H$s H¡${nQ>b Amdí¶H$VmAm| Ho$ {bE Z¶o
ture capital requirements. This enables the ex- eo¶g© Omar H$aZo H$s Amdí¶H$Vm Zht hmoVr h¡& ¶h {dÚ‘mZ
isting shareholders to retain the control of the eo¶ahmoëS>g© H$mo H§$nZr H$m {Z¶§ÌU àmßV H$aZo ‘| gj‘
company. NPP ~ZmVr h¡&

(C) Advantages to the society (C) g‘mO H$mo bm^
1. Increase in the rate of capital forma- 1. H¡${nQ>b ’$m°‘}eZ H$s Xa ‘| d¥{Õ… >EH$ ì¶mnma ‘|
tions: The retained earnings in a business lead [aQ>|S> A{Zª½g ì¶mnma Ho$ {dñVma VWm d¥{Õ H$m EH$ H$maU
to expansion and growth of business. The rate
hmoVr h¢& Xoe ‘| H¡${nQ>b ’$m°‘}eZ H$s Xa ~‹T>Vr h¡&
of capital formation increases in the country.
2. Rapid industrialization: The ploughing 2. Vrd« Am¡Úmo{JH$sH$aU… ì¶mnma ‘| bm^ H$m ßbmCB§J
back of profits into business stimulates indus- ~¡H$ Xoe ‘| Am¡Úmo{JH$sH$aU H$mo ~‹T>mVm h¡& Bg àH$ma nyam
trialization in the country. The nation as a Xoe Bggo bm^ H$‘mVm h¡&
whole thus benefits from it.
3. Increase in industrial capacity: The re- 3. Am¡Úmo{JH$ j‘Vm ‘| d¥{Õ…>> ì¶mnma ‘| bm^ H$m
investment of profits in the business meets a nwZ{Z©doe H§$nZr H$s {ZpíMV VWm d{Hª$J Amdí¶H$VmAm| Ho$
part of the fixed and working needs of the com- EH$ ^mJ H$mo nyam H$aVm h¡& AmYw{ZH$sH$aU VWm
pany. The modernization and rationalization
aoeZbmBOoeZ Am¡Úmo{JH$ CËnmXZ ~‹T>mVo h¢&
increase the industrial production.
4. Better quality of goods at reduced 4. H$‘ ‘yë¶ na dñVw H$s AÀN>r JwUdÎmm…> ì¶mnma
prices: The retained earning in business in- ‘| [aQ>|S> A{ZªJ CËnmXH$Vm ~‹T>mVr h¡, bmJV KQ>mVr h¡,
creases productivity, reduces costs, provides
dH©$g© H$mo A{YH$ Om°ãg àXmZ H$aVr h¡, CZHo$ doOog ‘|
more jobs to the workers and leads to increase
d¥{Õ H$m H$maU>hmoVr h¡ Am{X&
in their wages etc.
The industries are able to produce better CÚmoJ H$‘ bmJV na dñVwAm| H$s AÀN>r JwUdÎmm H$m
quality of goods at cheaper cost. CËnmXZ H$aZo ‘| ¶mo½¶ hmoVo h¢&