Correct Answer:
C. Equity shares
Long-term sources of finance are funds acquired for a period exceeding one year, typically used to finance fixed assets or long-term projects. Among the given options, Equity shares represent a long-term source.
- Equity shares provide permanent capital to a company, as shareholders are owners and their investment is not typically repaid unless the company is liquidated or shares are repurchased.
- Trade credit (A) is a short-term financing arrangement where suppliers allow customers to pay for goods or services at a later date, usually within 30-90 days.
- Bank overdraft (B) is a short-term borrowing facility that allows a company to draw more money than it has in its bank account, typically repayable on demand.
- Cash sales (D) represent revenue generated from immediate transactions, not a source of capital structure financing.
Thus, equity shares are distinct as a fundamental, long-term component of a company's capital structure.