Question

________ is/are not included in long-term finance.

• A. Equity shares
• B. Dividend
• C. Preference share
• D. Long-term loan

Hint:

Dividends are profit distributions to shareholders and are not a source of long-term financing.

Answer 1

The Correct Option is B

Step 1: Understanding long-term finance.
Long-term finance refers to funds raised for a period longer than one year, primarily used for purchasing fixed assets or for financing long-term investments. It includes sources such as equity shares, preference shares, and long-term loans. Dividends, however, are payments made to shareholders as a portion of the company's profits and are not considered part of long-term finance.
Step 2: Analyzing the options.
(A) Equity shares: This is incorrect. Equity shares represent ownership in a company and are a form of long-term finance.
(B) Dividend: Correct. Dividends are not considered a part of long-term finance; they are payments made from profits.
(C) Preference share: This is incorrect. Preference shares represent a source of long-term finance and are issued to raise funds.
(D) Long-term loan: This is incorrect. A long-term loan is a key form of long-term finance.
Step 3: Conclusion.
Dividend is not included in long-term finance, making the correct answer (B) Dividend.