हिंदी

Justify the following statement. Equity share capital is risk capital.

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प्रश्न

Justify the following statement.

Equity share capital is risk capital.

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उत्तर

Justification:

  1. Equity shareholders own the company and bear ultimate risk associated with the ownership. 
  2. The equity shares do not enjoy preference for dividend. Also, they do not have priority for repayment of capital at the time of winding up of the company.
  3. Equity shareholders do not carry any fixed commitment of dividend. They are paid dividend at the rate recommended by Board of Directors.
  4. If there is no profit, no dividend will be payable. Similarly, if there is less profit, lesser dividend will be paid. 
  5. The fortune of equity shareholders is tied up with the ups and downs of the company.
  6. They are described as ‘shock absorbers’ when company has financial crisis.

Hence, equity share capital is risk capital.

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Sources of Owned Capital - Shares
  क्या इस प्रश्न या उत्तर में कोई त्रुटि है?
अध्याय 2: Sources of Corporate Finance - Exercises [पृष्ठ ३८]

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बालभारती Secretarial Practice [English] Standard 12 Maharashtra State Board
अध्याय 2 Sources of Corporate Finance
Exercises | Q 6. 9. | पृष्ठ ३८
एससीईआरटी महाराष्ट्र Secretarial Practice [English] Standard 12 Maharashtra State Board
अध्याय 2 Sources of Corporate Finance
Justify the following statements | Q 3
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