Money contributed to businesses in return for part ownership of the business is called a(n)_____.

Question

Quizplus · Accepted Answer

Money contributed in return for part ownership of the business is called equity capital. This means that investors acquire an ownership in the company and may be entitled to certain rights such as voting rights, dividends, and a share of profits. Investment through equity capital is different from borrowing through debt or loans, where the borrower is required to repay the principal along with interest. A gift does not involve any exchange of money or ownership in the business.

Money Contributed to Businesses in Return for Part Ownership of the Business