{"id":43817,"date":"2024-04-15T21:34:54","date_gmt":"2024-04-15T21:34:54","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=43817"},"modified":"2024-04-15T21:34:54","modified_gmt":"2024-04-15T21:34:54","slug":"in-order-to-calculate-the-proportion-of-equity-financing-used-by-the-company-the-following-should-be-used","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-order-to-calculate-the-proportion-of-equity-financing-used-by-the-company-the-following-should-be-used\/","title":{"rendered":"In order to calculate the proportion of equity financing used by the company, the following should be used:"},"content":{"rendered":"

[amp_mcq option1=”Authorised Share Capital” option2=”Equity Share Capital plus Reserves and Surplus” option3=”Equity Share Capital plus Preference Share Capital” option4=”Equity Share Capital plus Long-term Debt” correct=”option2″]<\/p>\n

The correct answer is: B. Equity Share Capital plus Reserves and Surplus.<\/p>\n

Equity financing is a type of financing that a company uses to raise money by selling shares of ownership in the company. The equity share capital is the total value of all the shares that have been issued by the company. The reserves and surplus are the accumulated profits of the company that have not been distributed to shareholders.<\/p>\n

To calculate the proportion of equity financing used by the company, we need to add the equity share capital and the reserves and surplus. This will give us the total amount of equity financing that the company has used. We can then divide this number by the total assets of the company to get the proportion of equity financing used.<\/p>\n

Option A is incorrect because the authorised share capital is the maximum number of shares that a company can issue. It is not the actual number of shares that have been issued.<\/p>\n

Option C is incorrect because the preference share capital is a type of equity financing that gives shareholders a preference over common shareholders in terms of dividends and liquidation. It is not included in the calculation of the proportion of equity financing used.<\/p>\n

Option D is incorrect because long-term debt is a type of debt financing that a company uses to raise money by borrowing money from lenders. It is not included in the calculation of the proportion of equity financing used.<\/p>\n","protected":false},"excerpt":{"rendered":"

[amp_mcq option1=”Authorised Share Capital” option2=”Equity Share Capital plus Reserves and Surplus” option3=”Equity Share Capital plus Preference Share Capital” option4=”Equity Share Capital plus Long-term Debt” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-43817","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\nIn order to calculate the proportion of equity financing used by the company, the following should be used:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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