Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Resource Mobilisation

Question:

Harish is working as the Chief Accountant in XYZ infrastructure Pvt. Ltd. He came to know that the company is planning for an IPO (Initial Public Offer). What reward would Harish get in case he invests in the IPO ?

Options:

Increment in salary

Higher efficiency

Dividends and capital appreciation

Wider funds availability

Correct Answer:

Dividends and capital appreciation

Explanation:

The primary advantage an entrepreneur stands to gain by going public is access to capital. In addition, the capital does not have to be repaid and does not involve an interest charge. The only reward the IPO investors seek is an appreciation of their investment and possibly dividends.