Question

43. Difficult to obtaining capital from public is an effect of Ops: A. over capitalisation B. profit C. sales D. return

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Answer 1

Answer:A. over capitalisation

Explanation:

Answer 2

The difficulty to obtain capital from the public is an effect of return.

• When a company wants to raise capital from the market it needs to show their profit sales which determine the returns that the investors would receive on the investment.
• If the sales are low but the profit margin is high the investors would be keen to invest hoping that the sales would go up with increased marketing and promotional activities. The investors are interested in the profit because of the return.