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.

Question

Quizplus · Accepted Answer

From the shareholders' perspective, the measure of competitive advantage that matters most is the return on their risk capital, which is the money they provide in return for an equity share, money that they cannot recover if the firm goes bankrupt.

Which of the Following Is Not True of Risk Capital