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Question
Justify the following statement.
Different investors have different preferences.
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Solution
Justification:
- The investors are the persons who invest the capital in the company. They can invest in equity share capital or preference share capital.
- The investors who can take the risk, invest in equity shares. They are known as the ultimate risk bearer.
- The investors who are cautious, conservative, interested in the safety of capital, generally invest in preference shares.
Thus, it is rightly justified that, different investors have different preferences.
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