Q.The equity capital stock of a company is divided into parts called –

The equity capital of a company is divided into units called shares — option (A).

When a company is formed, its total capital requirement is broken down into small units of a fixed value (say, Rs. 10 or Rs. 100 each) so that it can be raised from a large number of investors in small amounts. Each such unit is called a share, and the aggregate of these shares forms the company's share capital. A person who buys shares becomes a shareholder and a part-owner of the company, entitled to dividends and voting rights in proportion to the shares held.

The other options are different financial instruments, not units of equity ownership:

• (B) Debentures are units of a company's borrowed/loan capital, not ownership capital — a debenture holder is a creditor of the company, not an owner. …