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Sources Of Business Finance

Question

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Give difference between equity and preference shares. (Annual Exams. 1999)

Solution

Equity Shares

Preference Shares

1. Nominal value of equity shares is low.

2. Degree of risk is high.

3. Rate of dividend is not fixed.

1. Nominal value of preference shares is high.

2. Degree of risk is low.

3. Rate of dividend is fixed.

Some More Questions From Sources of Business Finance Chapter

Give meaning of medium-term finance.

Give meaning of short-term finance.

Define shares.

Give the types of shares.

Define preference shares.

Give meaning of equity share.

Give the meaning of debenture.

Define “Ploughing back of profits”.

Give meaning of trade credit.

Explain Bank Credit.

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