Multiple Choice QuestionMoney that a business obtains from its owners is called Blank______.Multiple choice question.dividendscapital gainsinterestequity capital
Question
Multiple Choice QuestionMoney that a business obtains from its owners is called Blank______.Multiple choice question.dividendscapital gainsinterestequity capital
Solution
The correct answer is "equity capital". This term refers to the money that a business obtains from its owners or shareholders. Here's a step-by-step explanation:
-
Dividends: These are a portion of a company's earnings that are paid to shareholders, or owners of the company's stock. So, this is money going from the company to the owners, not the other way around.
-
Capital gains: This is the increase in value of an investment or real estate that gives it a higher worth than the purchase price. It's not money a business obtains from its owners.
-
Interest: This is the cost of borrowing money, typically expressed as a percentage of the loan amount. It's not money a business obtains from its owners.
-
Equity capital: This is money provided to a business by its owners (or shareholders) in exchange for an ownership interest in the company. This is the correct answer because it's the money a business obtains from its owners.
Similar Questions
Multiple Choice QuestionThe purchase of one company by another, usually by buying its stock, is called a(n) Blank______.Multiple choice question.dividendjoint ventureacquisitionmerger
Multiple Choice QuestionProfits a company keeps and reinvests in the firm are called ______.Multiple choice question.dividendscorporate sharesretained earningscollateral
Multiple Choice QuestionEconomic resources owned by a firm are called Blank______.Multiple choice question.creditsendowmentsassetsgoods
Multiple Choice QuestionWhen the board of directors distributes some of a corporation's profits to the owners, it issues them as ______.Multiple choice question.common stockcash dividend paymentsretained earningsequity holdings
Multiple Choice QuestionBecause a firm's entrepreneurs receive only the revenue left over after all other factors of production have been paid, they are considered Blank______.Multiple choice question.incentive functionsexecutivesstockholdersresidual claimants
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.