Equity Shares and Capital Quiz
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Questions and Answers

What is the primary characteristic of equity shares?

  • Special rights in capital repayment
  • Ownership of the company (correct)
  • Guaranteed annual dividend
  • Preferential rights in dividend payments

    • What type of rights do equity shareholders have in the company?

  • No rights in company activities
  • Limited control based on shareholding
  • Control through voting rights (correct)
  • Exclusive rights in capital repayment

    • How does equity share capital affect creditors?

  • Increases the confidence of creditors (correct)
  • Causes creditors to withdraw loans
  • Has no impact on the confidence of creditors
  • Decreases the confidence of creditors

    • During losses, what happens to the dividend for equity shareholders?

    <p>It is not paid</p> Signup and view all the answers

    What is the primary function of equity share capital in raising long-term capital for a company?

    <p>Basis for loans</p> Signup and view all the answers

    What rights do equity shareholders have in the company's activities?

    <p>Control</p> Signup and view all the answers

    Who are the primary risk bearers in the case of losses for a company?

    <p>Equity shareholders</p> Signup and view all the answers

    How does equity share capital impact the confidence of creditors?

    <p>Increases the confidence of the creditors</p> Signup and view all the answers

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