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Question
"They assume greater risk of loss of capital," this is degree of risk estimated by ______.
Options
Creditors
Stakeholders
Both (A) and (B)
None of these
Solution
"They assume greater risk of loss of capital," this is degree of risk estimated by stakeholders.
Explanation:
Stakeholders, including investors and shareholders, assume the risk of loss of capital when they invest in a business. They are directly affected by the financial performance and potential losses of the company. Creditors, on the other hand, primarily assume the risk of not being repaid but do not typically bear the risk of capital loss in the same way stakeholders do.
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