Question

True or False

Answer 1

That statement is false

In business, the amount of equity could be changed through either of these two ways:

- The first one is by buying out the shares that the company released. People would have more equity/ownership in the company if they hold more shares.

- If the majority shareholders in the company have agreed to sacrifice the percentage of their ownership and granted it to someone else.

Answer 2

The statement is false.

Once the amount of equity someone has in a business has been established, it cannot be changed. The statement is false. Equity can be changed.

Further Explanation:

Equity:

The equity can be invested by the people in the business, and the amount of equity can be changed. If the company offers the shares to the public, people can invest in the business. They can have ownership of the company's’ over that asset by investing in the business, or by purchasing the shares of the company. Equity is the difference between the amount owed and the amount took on loan, in which the owned amount is the equity amount. The owned amount is known as the equity amount. For example, if a person has purchased a phone of $5,000 and in which of $3,000 amount is taken on the loan. The equity amount will be $2,000.

Therefore, the amount of equity can be changed.

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Answer Details:

Grade: High school

Chapter: Equity

Subject: Business studies

Keywords:

True or False, once the amount of equity someone has in a business has been established, it cannot be changed, and the statement is, false, owned amount, equity amount, loan amount.