The owners of an entity are regarded as equity investors whether they are sole traders, partnerships or shareholders in a multinational corporation, whereas preference shareholders may be classified as equity or debt investors depending on the characteristics of the shares.

Question

Quizplus · Accepted Answer

The statement is true. The owners of an entity, regardless of their legal form, are considered equity investors. However, preference shareholders may be classified as equity investors or debt investors depending on the terms of the preference shares.

The Owners of an Entity Are Regarded as Equity Investors