Which term refers to permanent capital raised by issuing shares?

Study for the Bachelor of Business and Economics (BBE) Entrance test. Focus on Math with flashcards and multiple choice questions, each accompanied by hints and explanations. Prepare effectively for your exam!

Multiple Choice

Which term refers to permanent capital raised by issuing shares?

Explanation:
Equity finance is the term for permanent capital raised by issuing shares. When a company sells shares, it brings in funds in exchange for ownership in the business. Those funds aren’t a loan and don’t have a fixed repayment date; instead, shareholders gain through potential dividends and stock price appreciation and typically have voting rights. This distinguishes it from assets (the resources a company owns), denomination (the face value of money), and derision (ridicule), which aren’t about raising capital.

Equity finance is the term for permanent capital raised by issuing shares. When a company sells shares, it brings in funds in exchange for ownership in the business. Those funds aren’t a loan and don’t have a fixed repayment date; instead, shareholders gain through potential dividends and stock price appreciation and typically have voting rights. This distinguishes it from assets (the resources a company owns), denomination (the face value of money), and derision (ridicule), which aren’t about raising capital.

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