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प्रश्न
Justify the following statement.
Equity share capital is risk capital.
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उत्तर
Justification:
- Equity shareholders own the company and bear ultimate risk associated with the ownership.
- 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.
- Equity shareholders do not carry any fixed commitment of dividend. They are paid dividend at the rate recommended by Board of Directors.
- If there is no profit, no dividend will be payable. Similarly, if there is less profit, lesser dividend will be paid.
- The fortune of equity shareholders is tied up with the ups and downs of the company.
- They are described as ‘shock absorbers’ when company has financial crisis.
Hence, equity share capital is risk capital.
संबंधित प्रश्न
Select the correct answer from the options given below and rewrite the statement.
______ is a smallest unit in the total share capital of the company.
Select the correct answer from the options given below and rewrite the statement.
______ are residual claimants against the income or assets of the company.
______ participate in the management of their company.
______ shares are issued free of cost to existing equity shareholders.
Select the correct answer from the options given below and rewrite the statement.
The holder of preference share has right to receive ______ rate of divided.
______ is paid on borrowed capital.
Write a word or a term or a phrase which can substitute the following statement.
The holders of these shares are entitled to participate in the surplus profit.
Write a word or a term or a phrase which can substitute the following statement.
Name the shareholders who participate in the management.
Equity shareholders enjoy a fixed rate of dividend.
Complete the sentence.
The convertible preference share holders have a right to convert their shares into ______
Equity shareholders elect their representatives called ______.
Answer in one sentence.
What is a share?
Correct the underlined word and rewrite the following sentence.
Preference shares get dividend at fluctuating rate.
Study the following case/situation and express your opinion.
Mr. Satish is a speculator. He desires to take advantage of growing market for company's product and earn handsomely
- According to you which type of share Mr. Satish will choose to invest?
- What does he receive as return on investment?
- State any one right which he will enjoy as a shareholder.
Justify the following statement.
Different investors have different preferences.
State the features of equity shares.
Answer the following question.
Define preference shares. What are the different types of preference shares?
Justify the following statement.
Equity shareholder enjoys certain rights.
Explain the following term/concept in detail:
Equity shares
Explain the following term/concept in detail:
Preference shares
