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Difficulty: MediumPublic Enterprises: Rationale, Features, Management, and Control

A statutory public corporation can raise equity capital by issuing shares to the general public on the stock exchange.

Answer: Answer

Answer

The statement is False. Statutory public corporations are funded through government allocations, grants, and loans rather than by issuing shares to the public on the stock exchange.
Statutory public corporations obtain their operational and investment capital from government funds, grants, or authorized loans. They cannot issue stock or shares to private individuals on a stock exchange.

Step-by-Step Solution

1
Examine the legal setup and ownership structure of statutory public corporations.
Statutory public corporations are established by an Act of Parliament or state decree and are wholly state-owned.
Ownership dictates how an organization is allowed to source its capital.
2
Compare funding sources of public corporations with public limited companies.
Public limited companies raise equity capital by selling shares on the stock exchange, whereas public corporations rely on treasury allocations, government loans, or revenue reinvestment.
The word 'public' in public corporations denotes state ownership, not public share holding.

Key Concept

Capital sources and financial structure of public enterprises
Estimated Time:1m 0s
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Topics

Public Enterprises: Rationale, Features, Management, and Control

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