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PART B: BUSINESS ORGANISATION STRUCTURE, FUNCTIONS AND GOVERNANCE 
 
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(i) 
New share issues, for example by companies acquiring a stock market listing for the first 
time 
(ii) 
Rights issues (ie when existing companies issue shares to investors for money) 
(iii) 
Issues of loan capital 
(b) 
Money markets
, on the other hand, are markets for trading 
short-term
financial instruments, bills 
of exchange and certificates of deposits. 
(c) 
Retained earnings
, when profits earned in a year may be kept in the company as opposed to 
being distributed to shareholders. 
(d) 
Bank borrowings
(on a short- or long-term basis). Interest payments cannot be reduced to reflect 
changed circumstances. 
(e) 
Government sources
(grants, tax reliefs) 
(f) 
Venture capital
(g) The 
international money and capital markets 
(eurocommercial paper, eurobonds and 
eurocurrency borrowing) 
QUESTION 
Finance function
 
What sources of finance are available to a public sector organisation? 
ANSWER 

Taxation of incomes and company profits, excise, sales tax (VAT) receipts (central government) 

Sale of gilts (government securities) to investors 

Borrowing from external sources (eg issuing eurobonds) 

Council 
tax 

User fees (eg charge for using a leisure facility) 

Retail prices (eg train fares) 

Other special charges (eg the 'nuclear levy' on electricity bills) 

Charging overseas users (eg universities for overseas students) 

Funds from central government 

Issuing of municipal bonds (on the money markets) 

Long-term loan finance (eg for local authorities)