Question

Assertion (A): Transferability of shares makes public companies more attractive to investors.

Reasoning (R): Public companies allow shareholders to transfer shares without restrictions, providing liquidity to their investments.

विकल्प

• Both A and R are true, and R is the correct explanation of A.

• Both A and R are true, but R is not the correct explanation of A.

• A is true, but R is false.

• A is false, but R is true.

Answer 1

Both A and R are true, and R is the correct explanation of A.

Explanation:

Transferability of shares makes public companies attractive to investors because shareholders can easily sell their shares on the stock exchange without restrictions. This liquidity allows investors to convert their investments into cash whenever needed, providing flexibility and reducing the risk of long-term commitment. Public companies provide this facility of unrestricted transfer of shares, which encourages more people to invest. Hence, the assertion and reasoning are both true, and the reasoning correctly explains the assertion.