The Primary Role of Capital for an FI Is to Assure

question 103

True/False

The primary role of capital for an FI is to assure the highest possible return on equity for its shareholders.

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Definitions:

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, often with fixed dividends.

Common Shares

Equity securities that represent ownership in a company, entitling holders to vote at shareholder meetings and to receive a share of the company's profits through dividends.

Book Values

The value of an asset or liability according to its balance sheet account balance, taking into account the cost of the asset minus depreciation.

Non-Controlling Interest

A portion of equity in a subsidiary not owned by the parent company, reflecting the minority shareholders' share of the assets and earnings.