The three broad components of equity for a company are:
A) public equity, contributed equity, government equity
B) ordinary shares, preference shares, options
C) share capital, retained earnings, reserves
D) ordinary shares, preference shares, reserves

Question

Quizplus · Accepted Answer

The three broad components of equity for a company are share capital, retained earnings, and reserves. Share capital consists of ordinary and preference shares, which represent the initial investment made by shareholders in the company. Retained earnings are the profits that are kept by the company instead of being distributed as dividends to shareholders. Finally, reserves are funds set aside by the company for specific purposes, such as to cover future contingencies or to finance capital expenditures.

The Three Broad Components of Equity for a Company Are