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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

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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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

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