What is equity shares and its merits and demerits?

What is meant by equity share?

What are Equity Shares? Equity shares are long-term financing sources for any company. These shares are issued to the general public and are non-redeemable in nature. Investors in such shares hold the right to vote, share profits and claim assets of a company.

What is the merits of equity shares?

Investors of the company get the right to vote, share in profits, claim on assets of the company, etc. Face value, par value, book value, etc. are some of the terms used to express the value of the equity shares of the company. Let us now learn about the advantages of equity shares.

What are the demerits of equity shares?

Disadvantages of Equity Shares:

  • If only equity shares are issued, the company cannot take the advantage of trading on equity.
  • As equity capital cannot be redeemed, there is a danger of over capitalisation.
  • Equity shareholders can put obstacles for management by manipulation and organising themselves.

What is equity share class 11?

Equity Share Meaning

An equity share, normally known as ordinary share is a part ownership where each member is a fractional owner and initiates the maximum entrepreneurial liability related to a trading concern. These types of shareholders in any organization possess the right to vote.

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Who can buy equity shares?

As such there is as such no age restriction for investing in stock markets of India. It’s just that you should be more than 18 years old to create a Demat account and a trading account. To open your Demat and trading account a PAN card is a must. And you can only apply for a PAN card if you are18 years or older.

What is equity shares and list out its advantages?

Equity shares give the right to the holders to claim dividend on the surplus profits of the company. The rate of dividend on the equity capital is determined by the management of the company. Equity shares are transferable in nature. They can be transferred from one person to another with or without consideration.

What is equity share in India?

Equity shares are issued in India, so a businessman may expand his business and share the profits of the company with shareholders through dividends and bonus. So, a company issues shares to the public through an Initial Public Offering also called IPO and the shares are then listed on the stock exchanges.

What do you mean by equity?

Equity represents the value that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debts were paid off. … The calculation of equity is a company’s total assets minus its total liabilities, and is used in several key financial ratios such as ROE.