Question

Equity shareholders are ______.

Options

• creditors

• owners

• customers of the company

• None of the above.

Answer 1

Equity shareholders are owners.

Explanation:

Equity shareholders are the actual owners of a company because they provide the permanent risk capital needed to start and run the business. By purchasing equity shares, they acquire fractional ownership rights, which give them the power to vote on key corporate decisions and elect the Board of Directors to manage operations. Unlike creditors, they do not receive a fixed rate of return, meaning they bear the highest financial risk but also enjoy residual profits through dividends and capital growth.