Quick Answer: What is equity shares explain its features?

What are the main features of equity shares?

Features of Equity Shares Capital

  • Equity share capital remains with the company. It is given back only when the company is closed.
  • Equity Shareholders possess voting rights and select the company’s management.
  • The dividend rate on the equity capital relies upon the obtainability of the surfeit capital.

What is shares explain its features?

Meaning: –Total share capital of a company is divided into many units of small denominations. Each such unit is called as a share. … It also gives certain rights to its holder i.e. a shareholder has a right to share the profits of the company throughout its life as well as assets of the company at the time of winding up.

What is an equity share explain any four features?

Equity shareholders are the actual owners of the company and they bear the highest risk. 3. Equity shares are transferable, i.e. ownership of equity shares can be transferred with or without consideration to other person. 4. Dividend payable to equity shareholders is an appropriation of profit.

What is equity shares explain its features advantages and disadvantages?

Equity Shares: Features, Advantages and Disadvantages of Equity Shares. … Equity shareholders are paid dividend after paying it to the preference shareholders. The rate of dividend on these shares depends upon the profits of the company. They may be paid a higher rate of dividend or they may not get anything.

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What is equity share in simple words?

All shares that are not preferential shares are equity shares and are also known as ordinary shares. A person who holds equity shares has the right to vote in the company’s decisions. As an equity shareholder, you are entitled to receive a claim to any profits paid by the company in the form of dividends.

What are the advantages of equity shareholders?

Advantages of Equity Shares

  • Profit Potential. Equities have the potential to fetch good returns. …
  • Potential returns that tackle inflation. …
  • Dividend Income. …
  • Exercise Control. …
  • Right Over Assets and Income. …
  • Diversification of Portfolio. …
  • Bonus Shares. …
  • Right Shares.

What are the 4 types of stocks?

Here are the most common types of stocks:

  • Income Stocks. As its name suggests, this security generates a steady and stable income in the form of a dividend. …
  • Cyclical Stocks. …
  • Blue-Chip Stocks. …
  • Speculative Stocks. …
  • Defensive Stocks. …
  • Growth Stocks.

What is share and its advantages?

Equity shares give the right to the holders to claim dividend on the surplus profits of the company. The rate of dividend on the equity capital is determined by the management of the company. • Equity shares are transferable in nature. They can be transferred from one person to another with or without consideration.

What are types of shares?

Thus, there are two types of shares: equity shares and preferential shares.