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WAEC Commerce 2004 Question 9

Question 9

Business Units

A private company's ability to raise capital is limited because

  1. A.its borrowing powers are limited
  2. B.membership does not exceed 50
  3. C.shares cannot be made public
  4. D.of limited collateral security
Show the answer and explanation

Answer: C (shares cannot be made public)

Explanation

A private company cannot offer its shares to the public, which limits the capital it can raise.