Unit-6 Sources Of Long-Term Finance And Underwriting

In this unit we shall examine in detail the nature and importance of long-term finance.

State briefly the functions of the Unit Trust of India.

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Learning Pundits Content Team

Written on Apr 15, 2019 6:23:37 PM

The UTI invests its funds in shares and debentures of different companies. The securities (shares and debentures) are held in trust by the management. Based on the value of the securities, the management offers 'units' to the public. Each unit having a specified face value is a kind of certificate of participation in the 'unit scheme'. Individuals can buy and sell units at any time. The management receives interest and dividend on the debentures and shares held by them. The income so realized is distributed among the unit-holders in proportion to the value of their holdings. Thus, small savers find it convenient to buy units with an assurance that the UTI will invest the savings in profitable companies, and give them a reasonable return by way of dividend on value of units. On the other hand, the investible funds of the UTI are available to industrial enterprises.

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