Which of the Following Is Not True of Risk Capital

question 72

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.

---

Definitions:

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the party to be charged, to be enforceable.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party, if the latter has reasonably relied on that promise to their detriment.

Preliminary Performance

Initial actions or activities undertaken before the main performance, often to prepare or test.

Statute of Frauds

A legal principle that requires certain types of contracts and agreements to be written and signed to be considered enforceable.