Equity capital for which there is a guarantee that stockholders will recoup their investment and earn a decent return is called risk capital.

Question

Quizplus · Accepted Answer

Equity capital for which there is a guarantee of recouping the investment and earning a decent return is called guaranteed or preferred equity, not risk capital. Risk capital refers to investments made with a higher degree of risk and potential for higher returns, but with no guarantee of recouping the initial investment.

Equity Capital for Which There Is a Guarantee That Stockholders