[amp_mcq option1=”Equity capital” option2=”Preference capital” option3=”Debentures” option4=”All of above” correct=”option3″]<\/p>\n
The correct answer is C. Debentures<\/strong>.<\/p>\n Debentures are loans that a company takes from investors. The investors are called debenture holders. The company is required to pay interest on the debentures, even if it does not earn profit. The interest rate is usually fixed at the time the debentures are issued.<\/p>\n Equity capital is the money that shareholders invest in a company. Shareholders are the owners of the company. They do not receive a fixed interest rate, but they do receive a share of the company’s profits, if any.<\/p>\n Preference capital is a type of equity capital. Preference shareholders receive a fixed dividend, even if the company does not earn profit. However, their dividend is paid after the dividend to ordinary shareholders.<\/p>\n Therefore, only debentures require the company to pay interest, even if it does not earn profit.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Equity capital” option2=”Preference capital” option3=”Debentures” option4=”All of above” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[695],"tags":[],"class_list":["post-46926","post","type-post","status-publish","format-standard","hentry","category-business-and-commerce","no-featured-image-padding"],"yoast_head":"\n