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Equity capital is....

a. paid back within one year.
b. not a loan but a form of stock.
c. a loan from family.
d. paid back after five years.

1 Answer

2 votes

Answer:

b. not a loan but a form of stock.

Step-by-step explanation:

Capital can either be equity or debt capital. Debt capital refers to borrowed funds either from the banks or other lenders.

Equity capital is the owner's contribution to the business. It is what the shareholders of the business have given to the business as capital. Equity is not a loan, nor is it meant to be refunded. It represents the owner's investment in the business.

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