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Business Studies

Equity Capital

is a prerequi...

Question

______ is a prerequisite to creation of a company.

A

Issuing preference shares

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B

Issuing equity shares

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C

Retaining earnings

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D

All of the above

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Solution

The correct option is B
Issuing equity shares

Issuing equity shares is a prerequisite to the creation of a company. When a company is formed it can issue shares to the public or to private individuals.

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