Tuesday, October 9, 2012

Equity Characteristics



Ordinary shareholders have the following characteristics:
  • Are the owner of the business.
  • They have limited liability regarding their business.
  • They hold an equity interest and residual claim on cash flows of their business.
  • They have voting rights to elect business agent to run their business.
Preferred shareholders have the following characteristics:
  • Shares that make take priority over ordinary shares in regards to individual shares on common shareholders.
  • They have right to get specified dividends.
  • They have characteristic of both fixed dividends and equity dividends.
  • They have no voting privileges to elect business agent to run their business.   

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