- 1 Marks
Question
The financial structure of a firm is made up of the following components EXCEPT:
A. Ordinary shares
B. Preference shares
C. Debentures
D. Undistributed profits
E. Dividends
Answer
E. Dividends
Explanation: The correct answer is E because dividends are a distribution of profits to shareholders, not a component of the financial structure. The financial structure refers to the mix of a firm’s financial liabilities and equity, which includes ordinary shares, preference shares, debentures, and retained earnings (undistributed profits).
- Tags: Debentures, Financial structure, Shares, Undistributed Profits
- Level: Level 1
- Topic: Basics of Business Finance and Financial Markets
- Series: NOV 2014
- Uploader: Dotse