Which of the Following Is NOT True of Risk Capital

question 56

Multiple Choice

Which of the following is NOT true of risk capital?

• A) From the shareholders' perspective, the measure of competitive advantage is primarily based on return on their risk capital.
• B) Risk capital invested in a firm can be legally recovered if the firm goes bankrupt.
• C) A person who provides capital to a firm gets equity shares in return.
• D) Return on risk capital includes stock price appreciation plus dividends received over a specific period.

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Definitions:

Face Value

The nominal or dollar value printed on a bond, note, or other financial instrument, indicating its worth at maturity.

Treasury Bond

A long-term government bond issued by the U.S. Treasury with a maturity period typically ranging from 20 to 30 years.

Face Value

The nominal or original value written on a financial instrument, such as a bond or stock certificate, not necessarily reflecting its market value.

Semi-Annual Coupon Bonds

Bonds that pay interest to holders twice a year, typically known for providing a steady income stream to investors.