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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.
______ are residual claimants against the income or assets of the company.
Select the correct answer from the options given below and rewrite the statement.
The accumulated dividend is paid to ______ preference shares.
Debenture holders are ______ of the company.
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.
The value of share which is written on the share certificate.
Write a word or a term or a phrase which can substitute the following statement.
The value of share which is determined by demand and supply forces in the share market.
State whether the following statement is true or false.
Equity share capital is known as venture capital.
Equity shareholders enjoy a fixed rate of dividend.
State whether the following statement is true or false.
Equity shareholders are described as ‘shock absorber’ when company has financial crisis.
Answer in one sentence.
What is a share?
Answer in one sentence.
What are cumulative preference shares?
Distinguish between the following.
Equity shares and Preference shares.
Justify the following statement.
Preference shares do not carry any voting rights.
Justify the following statement.
Different investors have different preferences.
Answer the following question.
Define preference shares. What are the different types of preference shares?
Explain the following term/concept in detail:
Equity shares
Explain the following term/concept in detail:
Preference shares
Justify the following statement.
Preference Shareholders get priority in dividends over equity shareholders.
