Equity shares represent ownership in a Co., with voting rights and profit share. Their value fluctuates with market trends and carry highest risk in liquidation
Equity shares, also known as common shares or ordinary shares, represent ownership in a company. Holders of equity shares are partial owners of the company and are entitled to vote in shareholder meetings, receive dividends (if declared), and share in the company’s profits. The value of equity shares is determined by the company’s performance and market conditions.
These shares are typically traded on stock exchanges, and their price fluctuates based on market demand and company performance. Equity shareholders bear the highest risk, as they are the last to receive any payments in case of liquidation after all debts are paid.
Example:
If a person owns 100 equity shares of XYZ Ltd., they have voting rights, may receive dividends if declared, and their share price can rise or fall based on the company’s performance in the market.
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