Owner's Funds-Part 1

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  • Q1

    Risk capital is provided by

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    Answer:

    equity shareholders.

    Explanation:
    Equity shares represent the ownership of a company and thus the capital raised by issue of such shares is known as ownership capital or owner's funds. Risk capital is a contribution of equity shareholders.
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  • Q2

    Control of the company will be diluted with the

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    Answer:

    issue of shares.

    Explanation:
    Control will be diluted with the issue of shares as only shareholders have the right to vote in the meeting of the company.
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  • Q3

    What is meant by 'stock' in terms of share capital?

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    Answer:

    'Stock' in share capital, refers to the aggregate of fully paid shares of a company, representing a portion of company’s capital. A company can convert its fully paid shares into stock, if certain conditions are satisfied, as per Companies Act, 1956.

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  • Q4

    What are internal sources of funds?

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    Answer:

    Internal sources of funds are those which are generated from within the business.

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  • Q5

    Who are real owners of a joint stock company?

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    Answer:

    Equity Shareholders of the company.

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