difference between Equity Capital and Preference capital?
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Answer Posted / samta
Equiy shareholder: known as "residual owner" of the
company.
1) After all the obligations of the company are
over, the Equity Share Holders get their share.
2) EQUITY SHARES are shares whose profit sharing
depends on the PROFIT MAKING of the Company.
3) Dividends to Equity Share holders is optional
and at company's discretion.
4) Has voting rights.
5) Has right to attend BOD meeting
6) equity share holder can take decisions for the
company and can obtain the profit or loss
incurred by the company.
7) real capital of the campany.
Preference Share:
1) Dividend is a fixed income to them
2) They get dividend at a fixed rate of interest,
irrespective of the Profit Making of the Company.
3) if company fails to pay the fixed rate of
dividend in any particular year due to loss,then the next
year it will pay dividend of two years to them on the
otherhand
4) cannot take decisions for the company
5) Prefence share is like loan for the company.
| Is This Answer Correct ? | 32 Yes | 4 No |
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