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    Question

    While evaluating long-term finance options, ABC Ltd.

    found that the cost of ordinary (equity) shares is the highest among all sources. What is the most likely reason for this?
    A Equity shares have a short repayment period. Correct Answer Incorrect Answer
    B Equity shareholders have no claim on company assets. Correct Answer Incorrect Answer
    C Equity shareholders expect higher returns due to higher risk. Correct Answer Incorrect Answer
    D Equity shareholders receive fixed interest payments. Correct Answer Incorrect Answer

    Solution

    The correct answer is C

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