Ownership
Question : Assertion-Reason Questions: Chapter - Sources of Business Finance
Questions : Equity Shares and Preference Shares
Assertion: Equity shareholders have ownership rights but limited voting power.
Reason: Equity shareholders are entitled to receive fixed dividends every year.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Both assertion and reason are false.
Correct Answer: Assertion is true, but the reason is false.
Solution : The correct answer is (c) Assertion is true, but the reason is false.
The assertion is true. Equity shareholders indeed have ownership rights in a company, which means they have a claim on the company's assets and earnings.
Question : Questions : Equity Shares and Preference Shares
Statement 1: Equity shareholders have ownership rights and voting power in company decisions.
Statement 2: Equity shareholders do not receive any dividends.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer: Both statements 1 and 2 are true.
Solution : The correct answer is (c) Both statements 1 and 2 are true.
Statement 1 is true. Equity shareholders have ownership rights in the company. They hold shares that represent ownership stakes in the company and have voting power, allowing
Question : Which concept is highlighted in the given statement? Statement: It aims to transfer of ownership of the goods through aggressive promotion.
Option 1: Selling
Option 2: Marketing
Option 3: Selling mix
Option 4: Marketing mix
Correct Answer: Selling
Solution : Selling is a narrow concept which is restricted to promotion of goods and services through salesmanship, advertising, publicity and short term incentive so that the title of the product is transferred from seller to buyer. Selling aims to transfer ownership of the goods through aggressive
Question : Case Study 73
RST Inc. is a technology startup aiming to raise funds for its research and development projects. The company's management is considering the trading procedures on a stock exchange.
Question :
What is the term used to describe the process of transferring ownership of securities from a seller to a buyer?
Option 1: Placing an order
Option 2: Execution of the order
Option 3: Settlement
Option 4: Dematerialization
Correct Answer: Settlement
Solution : The correct answer is (c) Settlement
The term used to describe the process of transferring ownership of securities from a seller to a buyer is "settlement." In the context of stock trading, after the buy and sell orders have been matched and executed (which is
Question : Case Study: LMN Ventures - Financing Innovation and Research
LMN Ventures is a research-driven technology company aiming to innovate and develop cutting-edge products. The company is exploring various sources of business finance to support its research and development endeavors.
Question:Different Sources of Finance
What is the primary characteristic of equity shares?
Option 1: Fixed dividend payments
Option 2: Ownership in the company
Option 3: Guaranteed redemption
Option 4: No voting rights
Correct Answer: Ownership in the company
Solution : The correct answer is (b) Ownership in the company
Equity shares represent ownership in a company and entitle shareholders to a portion of the company's profits, distributed in the form of dividends. Unlike debt instruments, such as bonds, equity shares do not
What distinguishes debentures from equity shares in terms of ownership and returns?
Option 1: Debentures provide ownership rights
Option 2: Debentures pay fixed dividends
Option 3: Equity shares have fixed interest rates
Option 4: Equity shares represent short-term borrowing
Correct Answer: Debentures pay fixed dividends
Solution : The correct answer is (b) Debentures pay fixed interest
This statement is correct. Debentures pay fixed interest to debenture holders, not dividends. The interest rate is predetermined and agreed upon at the time of issuing the debentures.
Question : Case Study : Leadership and Employee Development at ABC Tech
ABC Tech believes in leadership that focuses on employee development and growth. Consider the following scenario to answer the questions.
The CEO of ABC Tech values the well-being of employees and encourages them to take ownership of their work. This reflects which quality of leadership?
Option 1: Autocratic decision-making
Option 2: Laissez-faire leadership
Option 3: Empowerment and autonomy
Option 4: Isolation from employees
Correct Answer: Empowerment and autonomy
Solution : The correct answer is (c) Empowerment and autonomy.
Empowerment and autonomy in leadership involve providing individuals with the authority, responsibility, and freedom to make decisions and take ownership of their work. By valuing employee well-being and encouraging them to take ownership, the CEO
Question : Case Study: PQR Enterprises - Funding Strategies for Diversification
PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.
Questions : Debentures and Financial Instruments
How do GDRs and ADRs serve similar functions?
Option 1: Both are used to raise funds from domestic markets
Option 2: Both are forms of equity shares
Option 3: Both represent ownership in a company
Option 4: Both enable companies to raise funds in international markets
Correct Answer: Both enable companies to raise funds in international markets
Solution : The correct answer is (d) Both enable companies to raise funds in international markets
GDRs (Global Depositary Receipts) and ADRs (American Depositary Receipts) serve similar functions in that they both allow companies to raise funds in international
Correct Answer: Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.
Statement 1 is true. Equity shareholders have ownership rights in the company, and they possess voting power in company decisions. They can participate
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