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Question
Which of the following are the features of equity shares?
Options
It is a divisible part of the capital of a company.
It confers voting rights on its holder.
It creates certain liabilities on its holder.
Each share have some common number.
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Solution
It confers voting rights on its holder and it creates certain liabilities on its holder.
Explanation:
The following are the features of an equity share:
- It is an indivisible part of the capital of a company.
- It confers certain rights on its holder, e.g. dividend, voting power, return of capital, etc.
- It creates certain liabilities for its holder.
- Each share has a distinct number.
- Each share has a nominal or face value.
- The holder of a share is issued a share certificate under the seal of the company.
- It is a movable property and can be transferred in the manner laid down in the Articles of the Company.
RELATED QUESTIONS
Equity shareholders are called ______.
The capital of the company is divided into equal parts called ______.
Issue of ______ is the most important source of raising long-term finance.
Dividend on equity shares is paid out of the profits ______ paying interest on debentures and ______ dividend on preference shares.
The ______ holders are the main risk bearers. They provide risk capital because when the company fails and is closed, equity shareholders may lose their entire investment.
______ is attractive to bold and adventurous investors whereas ______ appeals to conservative and orthodox investors.
Equity shareholders are the real owners of business.
What is meant by Equity Shares?
Explain the advantages of equity shares as a source of long-term finance.
Explain the disadvantages of equity shares as a source of long-term finance.
