Final answer:
Shareholders' Equity is the value that would be returned to a company's shareholders after all assets are liquidated and debts are paid. It represents the owners' residual interest in the company's assets after liabilities. Option c
Step-by-step explanation:
Shareholders' Equity, also known as Owners' Equity or Stockholders' Equity, represents the residual interest in the assets of a company after deducting liabilities. When individuals or entities purchase shares, they become the shareholders or part owners of the firm, and thus have a claim on a portion of the company's assets and earnings.
Equity is the monetary value that would be returned to shareholders after all assets are liquidated and all debts are paid. This concept is critical in understanding a firm's financial structure and health.
For example, if a corporation was to be sold, after repaying all outstanding liabilities, the remaining assets would be distributed to the shareholders based on their equity stake.
Companies can raise financial capital early on through various means like personal savings, credit cards, or private investors such as angel investors and venture capital firms.
As the company grows, it may continue to raise capital through the sale of stock, issuing dividends to shareholders, or by borrowing from institutions through instruments like Treasury bonds. The process of raising financial capital is central to the growth and sustainability of a business. Option c