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Equity Shares Overview

Business Management10 CardsCreated 1 day ago

This deck covers the key concepts, characteristics, and types of equity shares, focusing on their roles, rights, and benefits.

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What are equity shares?

Equity shares are shares that have the last right to receive dividends and capital compared to preference shares.
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Key Terms

Term
Definition
What are equity shares?
Equity shares are shares that have the last right to receive dividends and capital compared to preference shares.
Why are equity shareholders considered 'true owners' of a company?
They are considered true owners because they take more risk than preference shareholders.
Do equity shareholders have voting rights?
Yes, equity holders have the right to vote based on the number of shares they hold.
Is the dividend rate fixed for equity shareholders?
No, the dividend rate for equity shareholders is not fixed and is related to the company's profits.
What rights do equity shareholders have regarding general meetings?
They have the right to attend general meetings, vote, and elect directors.
When is the capital repaid to equity shareholders?
Capital is generally not repaid during the company's existence, but during liquidation, it is repaid after preference shareholders if surplus funds ar...
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Equity Shares Overview
TermDefinition
What are equity shares?
Equity shares are shares that have the last right to receive dividends and capital compared to preference shares.
Why are equity shareholders considered 'true owners' of a company?
They are considered true owners because they take more risk than preference shareholders.
Do equity shareholders have voting rights?
Yes, equity holders have the right to vote based on the number of shares they hold.
Is the dividend rate fixed for equity shareholders?
No, the dividend rate for equity shareholders is not fixed and is related to the company's profits.
What rights do equity shareholders have regarding general meetings?
They have the right to attend general meetings, vote, and elect directors.
When is the capital repaid to equity shareholders?
Capital is generally not repaid during the company's existence, but during liquidation, it is repaid after preference shareholders if surplus funds are available.
What are 'shares of qualification'?
Shares of qualification are shares that directors consent to hold to become elected directors of the company.
What are some capital benefits of equity shares?
Capital benefits include right shares, bonus shares, and benefits from increases in share price.
What is an ordinary equity share?
Ordinary equity shares are essential for raising capital, and shareholders bear the real risk of business without guaranteed dividends.
What are sweat equity shares?
Sweat equity shares are allotted to directors or employees with special knowledge at a discount or without cash consideration.