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    Shares and Shareholders

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    andaposa9
    Shares represent ownership in a company and include two main types: ordinary shares (common stock) and preference shares. Ordinary shares entitle shareholders to share in company earnings and voting rights, while preference shares provide a fixed periodic income but generally no voting rights. There are four main types of shares that companies issue - ordinary shares, preference shares, cumulative preference shares, and redeemable shares - each with different rights and conditions regarding dividends, repayment, and voting.

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    Shares and Shareholders

    Uploaded by

    andaposa9
    14 views1 page
    Shares represent ownership in a company and include two main types: ordinary shares (common stock) and preference shares. Ordinary shares entitle shareholders to share in company earnings and voting rights, while preference shares provide a fixed periodic income but generally no voting rights. There are four main types of shares that companies issue - ordinary shares, preference shares, cumulative preference shares, and redeemable shares - each with different rights and conditions regarding dividends, repayment, and voting.

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    Shares represent ownership in a company and include two main types: ordinary shares (common stock) and preference shares. Ordinary shares entitle shareholders to share in company earnings and voting rights, while preference shares provide a fixed periodic income but generally no voting rights. There are four main types of shares that companies issue - ordinary shares, preference shares, cumulative preference shares, and redeemable shares - each with different rights and conditions regarding dividends, repayment, and voting.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    14 views1 page

    Shares and Shareholders

    Uploaded by

    andaposa9
    Shares represent ownership in a company and include two main types: ordinary shares (common stock) and preference shares. Ordinary shares entitle shareholders to share in company earnings and voting rights, while preference shares provide a fixed periodic income but generally no voting rights. There are four main types of shares that companies issue - ordinary shares, preference shares, cumulative preference shares, and redeemable shares - each with different rights and conditions regarding dividends, repayment, and voting.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 1

    Shares:

    Evidence of ownership that represents an equal proportion of a firm's capital. It entitles


    its holder (the shareholder) to an equal claim on the firm's profits and an equal obligation for the
    firm's debts and losses. Two major types of shares are (1) ordinary shares (common stock), which
    entitle the shareholder to share in the earnings of the firm as and when they occur, and to vote at
    the firm's annual general meetings and other official meetings, and (2) preference
    shares (preference stock) which entitle the shareholder to a fixed periodic income (interest) but
    generally do not give him or her voting rights.

    Types of shares
    A company may have many different types of shares that come with different conditions and rights.

    There are four main types of shares:

    • Ordinary shares are standard shares with no special rights or restrictions. They have the potential to give the
    highest financial gains, but also have the highest risk. Ordinary shareholders are the last to be paid if the company
    is wound up.
    • Preference shares typically carry a right that gives the holder preferential treatment when annual dividends are
    distributed to shareholders. Shares in this category have a fixed value, which means that a shareholder would not
    benefit from an increase in the business' profits. However, usually they have rights to their dividend ahead of
    ordinary shareholders if the business is in trouble. Also, where a business is wound up, they are likely to be repaid
    the par or nominal value of shares ahead of ordinary shareholders.
    • Cumulative preference shares give holders the right that, if a dividend cannot be paid one year, it will be
    carried forward to successive years. Dividends on cumulative preference shares must be paid, despite the earning
    levels of the business.
    • Redeemable shares come with an agreement that the company can buy them back at a future date - this can
    be at a fixed date or at the choice of the business. A company cannot issue only redeemable shares

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