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Which of the following is NOT considered a source of short‑term finance for a business?

easy MCQ 1 mark Class 12 · Business Studies · Financial Management
  1. Bank overdraft
  2. Commercial paper
  3. Equity shares
  4. Factoring
Answer
Equity shares

The correct answer is Equity shares — Select the option that does not belong to short‑term finance.

Step-by-step solution

  1. Read each option and recall the definition of short‑term finance (typically up to 1 year).
  2. Bank overdraft, commercial paper, and factoring are all repayable within a year, so they are short‑term sources.
  3. Equity shares represent permanent capital and are not repayable, thus not a short‑term source.
  4. Select the option that does not belong to short‑term finance.
Common mistake: Confusing long‑term equity with short‑term financing options.

Concept tested: Sources of short‑term finance

Published · How this solution was prepared and checked

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