Beyond any mortgage thereon and liability therein, the residual value of a business or property is called equity. Which of the following are also included by term equity ?
Correct answer: C. Both of them
- A. The market value of securities less any debt incurred and common stock and preferred stock
- B. Funds provided to a business by the sale of stock
- C. Both of them
- D. None of them
Explanation
Equity represents the owners' residual interest after liabilities are deducted from asset value, and it can be raised through the sale of common or preferred stock. Both statements describe equity or equity capital.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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