Question

Why are equity shares considered the best source of funding from a risk point of view?

a.

They have fixed rate of interest

b.

They are entitled to entire divisible profits

c.

They are less expensive

d.

They have tax advantages

Posted under IC 89 Management Accounting

Answer: (b).They are entitled to entire divisible profits Explanation:Equity shares are considered the best source of funding from a risk point of view because they are entitled to entire divisible profits.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. Why are equity shares considered the best source of funding from a risk point of view?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What makes debentures a cheaper source of funds compared to shares?

View solution

Q. In the context of financial management, what does the finance manager need to consider in decisions on procurement of funds?

View solution

Q. What are the major routes for raising funds from foreign sources in financial management?

View solution

Q. What does the finance manager need to identify, analyze, and decide in the context of cross-border capital?

View solution

Q. What risk factors does the finance manager need to consider in fund procurement decisions for projected investment decisions?

View solution

Q. What can slow down the economy growth rate and pull down corporate profitability in financial management?

View solution

Q. How does the finance manager handle abnormal hike in interest rates in financial management?

View solution

Q. What is the responsibility of the financial manager in allocation of funds decisions?

View solution

Q. What is the key objective of the financial manager in using funds effectively?

View solution

Q. What specialized knowledge and experience are required for decisions on employment of funds in financial management?

View solution

Q. What areas should the financial manager update their knowledge and understanding on in financial management?

View solution

Q. How are the decisions taken by the financial manager in Financial Management broadly classified?

View solution

Q. What does the scope of Financial Management involve?

View solution

Q. How has the scope of Financial Management expanded with the globalization of companies?

View solution

Q. What has broadened the scope and objectives of financial management in the last decade or two?

View solution

Q. How can the scope of Financial Management be analyzed in the present expansion of the capital market?

View solution

Q. In the Traditional Phase, what financial decisions were considered necessary and important?

View solution

Q. In the Modern Phase, what critical issues does financial management encompass for the maximization of wealth?

View solution

Q. What are the areas covered by the scope and objectives of financial management?

View solution

Q. What is the ultimate objective of financial management?

View solution
View All MCQs on IC 89 Management Accounting

Recommended Subjects

Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Total Quality Management

Enhance your understanding of quality management with our Total Quality Management...

Electronics and Communication Engineering

Explore the dynamic field of Electronics and Communication Engineering with our...

Geotechnical Engineering

Dive into the world of Geotechnical Engineering with our dedicated category. Explore...

Life Sciences

Delve into the diverse world of life sciences with our specialized category. Explore...

Non Verbal Reasoning

Enhance your cognitive abilities with our Non-Verbal Reasoning category. Dive into...

Avionics Engineering

Soar into the world of aviation technology with our Avionics Engineering category....

Mechanical Engineering

Explore the world of Mechanical Engineering with our specialized category. Dive into...

Fluid Mechanics

Unlock the mysteries of fluids and their behavior with our Fluid Mechanics category....

Engineering Geology

Explore the dynamic field of Engineering Geology with our specialized category. Delve...