Question

Assertion (A): Procedural delays are involved while raising funds through issue of equity share.Reason (R): Investors who want steady income may not prefer equity shares as they getfluctuating returns.(a) Both (A) and (R) are correct.(b) (b) Both (A) and (R) are incorrect.(c) (A) is correct but (R) is incorrect.(d) (A) is incorrect but (R) is correct.

Answer 1

Answer:

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Answer 2

The correct option is (a) Both (A) and (R) are correct.

• Both the statements are limitations in the issuance of equity share capital.
• Equity Capital refers to that portion of the capital of the organization that is uplifted in exchange for the share of the company's ownership. These shares are called equity shares.
• The equity shareholders are the company's owners, who have significant power over the company's management and benefit from the rewards as well as the risk of ownership.
• However, there are administrative delays in the issuance, and investors frequently receive erratic returns.