Finances are needed by business organizations to acquire business assets as well as run daily activities such as stocking, distributions, payment of wages and marketing. There are various sources of finances. According to (Barrow et.al 275) the source of finances is dictated by various factors such as the size of the business, rate of interest, nature of the business as well as general performance of the economy. There are various sources of finance. They include shareholder contribution, retained profits, loan stock and borrowings from the commercial banks.
Tesco plc is an international grocery and retail chain. Jack Cohen founded Tesco in 1919. In 1947, Tesco Stores limited was listed on the London Stock Exchange. The company has continued to expand since it was established. The company has continued to make profits, especially for the last twelve years. The company’s mission is “to create value for its customer, to earn customer loyalty”. The vision is to be the leading international grocery and retail chain. Its objectives are to satisfy their customers and create wealth for the company. Tesco has become one of the most competitive retail companies in the world. Tesco is the fourth-largest retailer after Wal-Mart, Home depot and Carrefour. The company wishes to expand and seek better ways of obtaining business funds to expand.
According to (Fields 292) the first source of finance is shareholder contribution. This can be in the form of new share issues or the right issues. A company that seeks finance may sell its shares to the public through the initial public offers. In this case, companies making the acquisition of the stock market are listed for the first time. Initial public offers are made in various circumstances especially when a company might desire to raise more cash. . .