Madhav s is one of Kenyan s most trusted brands in the sweets and snacks segment. The
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Question:
Madhavs is one of Kenyans most trusted brands in the sweets and snacks segment. The company has manufacturing plants in Mombasa, Nairobi, Nakuru, and Eldoret. Madhavs has its own retail chain stores and a range of restaurants in these towns. Now, the company plans to extend its business to more towns in Kenya. In order to raise the funds, its directors have decided to float a public issue through the prospectus. Besides, it intends to raise money to meet the floatation costs in terms of brokerage, underwriting commission, advertising, etc. In the context of the above case:
What is the other name used for the funds required to meet floatation costs?
Describe briefly the shortterm instrument popularly used by the companies to raise the funds required to meet floatation costs. Who can issue them?
Distinguish between the two types of financial markets that the company intends to approach to meet its financial needs.
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