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Question
The ______ holders are the main risk bearers. They provide risk capital because when the company fails and is closed, equity shareholders may lose their entire investment.
Options
Equity Shares
Preference shares
Debentures
Loans from commercial banks
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Solution
The equity shares holders are the main risk bearers. They provide risk capital because when the company fails and is closed, equity shareholders may lose their entire investment.
Explanation:
Equity shareholders are the main risk‑bearers who supply risk capital. They have residual claims and are paid only after creditors and preference shareholders, so if the company fails, they can lose their entire investment.
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