5 Questions
What is the primary classification of capital based on?
The contributors of funds, the period for which money is contributed, the cost of the funds to the firm, and the rights that accrue to the contributors of the funds
What are individuals or institutions contributing debt capital called?
Lenders
What do outside investors become when they contribute equity capital to a business?
Shareholders
What are funds brought in by promoters and owners of the business called?
Equity capital
When can equity capital be brought into a business?
At the start of a business or at a later date as the business grows
This quiz covers the fundamental concepts of financing a business through equity and debt, including contributions by owners and outsiders, and the role of promoters in providing initial funds.
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