Final answer:
Business equity comprises shareholder funds, which include financial reserves, tangible investments, and retained earnings. These elements contribute to the overall value of a business that would be available to shareholders upon liquidation. It seems to be all the options are correct.
Step-by-step explanation:
Equity represents the value of a business that is held by its owners and can be understood as the monetary value remaining after all debts and liabilities have been settled. In the context of a business, equity can consist of various components. Specifically, equity is the compilation of shareholder funds, which include financial reserves, tangible investment, and retained earnings.
Financial reserves are undistributed profits that have been set aside to strengthen the company's financial base or for future investment.
Tangible investments refer to physical assets that a company owns, such as property, machinery, or equipment. Retained earnings are a portion of the company's profits that have been retained within the company, rather than distributed to shareholders as dividends.
Together, these elements contribute to the total equity or net worth of a business and reflect the value that would be returned to shareholders if the business were liquidated.