Advertisements
Advertisements
Question
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.
Advertisements
Solution
- According to me, Mr. Satish should invest in Equity shares. So that he can take the overall benefit of the profits and also enjoy all the rights and can participate in the management of the company.
- He may receive the dividend as a return on investment. But, the dividend received by the equity shareholder is fluctuating. It depends on the profit of the company.
- The right which he will enjoy as a shareholder are as follows:
- Right to vote: It is the basic right of equity shareholders through which they elect directors, alters Memorandum and Articles of Association, etc.
- Right to share in profit: It is an important right of equity shareholders. They have the right to share in profit when distributed as dividends.
- Right to inspect books: Equity shareholders have the right to inspect statutory books of their company.
- Right to transfer shares: Equity shareholders enjoy the right to transfer the shares as per the procedure laid down in the Articles of Association.
APPEARS IN
RELATED QUESTIONS
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.
Select the correct answer from the options given below and rewrite the statement.
The accumulated dividend is paid to ______ preference shares.
Write a word or a term or a phrase which can substitute the following statement.
The ‘real masters’ of the company.
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.
Complete the sentence.
The convertible preference share holders have a right to convert their shares into ______
Equity shareholders elect their representatives called ______.
Complete the sentence.
Bonus shares are issued as gift to ______
Answer in one sentence.
What are preference shares?
Correct the underlined word and rewrite the following sentence.
Preference shares get dividend at fluctuating rate.
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.
Equity share capital is risk capital.
The dividend is paid first to ______ shareholders.
Explain the following term/concept in detail:
Equity shares
Justify the following statement.
Preference Shareholders get priority in dividends over equity shareholders.
