Let us look at the various types of shares a company can issue – equity shares and preferential shares. Equity shareholders are the actual owners of the company and they bear the highest risk. Equity share capital refers to the portion of the company's money which is raised in exchange for a share of ownership in the company. There are different types of shares such as equity shares, preference shares, bonus shares, right …
A share or the proportion of interest of a shareholder is equal to the proportion of the amount paid to the total capital payable to the company. 2. 3. ownership of equity shares can be transferred with or without consideration to other person. If only equity shares are issued, the company cannot take the advantage of trading on equity. Debt is the amount of capital that has to be repaid, such as a bank loan. The income received from the ownership of shares is a dividend. A business’s capital structure generally has both equity and debt. The process of purchasing and selling shares often involves going through a stockbroker as a middle man. Equity: Generally speaking, equity is the value of an asset less the amount of all liabilities on that asset. As equity capital cannot be redeemed, there is a danger of over capitalisation. Equity share is a main source of finance for any company giving investors rights to vote, share profits and claim on assets. In case of profits, equity shareholders are the real gainers by way of increased dividends and appreciation in the value of shares.
5. Equity Shares Meaning. 2. Equity shares are transferable, i.e. Disadvantages of Equity Shares: 1. 5. 4. Dividend payable to equity shareholders is an appropriation of profit. 3. It can be represented with the accounting equation : Assets -Liabilities = Equity.