TOPICS

WEEK THIRD TERM SCHEME

SS1 ECONOMICS

* TYPES OF SHARES IN JOINT

STOCK; COOPERATIVE
SOCIETIES, POPULATION
* THEORY OF POPULATION
1 DISTRIBUTIVE TRADE
2 MIDDLEMEN
3 MONEY
4 FINANCIAL INSTITUTION
5 CONCEPT OF DEMAND
 &SUPPLY
6 EQUILIBRIUM PRICE
7 MID TERM
8 NATURE OF NIGERIA
ECONOMY-
PRY,SECONDARY,ETC
9 AGRICULTURE
10 MINING

ECONOMICS
TOPIC : BUSINESS ORGANISATIONS :JOINT STOCK COMPANIES SHARES
SSS:1

A share is the smallest unit into which the capital of a company is

divided.It is the money- capital of a shareholder (individual owner) of a
company. The reward or profit of the shareholder when the company
declares or announces it profit is called DIVIDEND .
TYPES OF SHARES: There two major types of shareholders;
1. Preference shares
2. Ordinary shares
A preference share is type that has priority or must be paid or given
dividend abd repayment of capital when winding up .Preference
shareholders have fixed rate of dividend.
FEATURES OF PREFERENCE SHARES
i. They have no voting right
ii. They fixed rates of interest(dividends)
iii. They receive dividend before others
TYPES OF PREFERENCE SHARES
1. Cumulative preference shares: The holders or owners of the type
share have advantage over others in payment of dividend as they
receive shares of dividend not paid before other shareholders
(arrears of dividend).
2. Participating preference shares : The holders of the shares are
entitled to further percentage of dividend after ordinary
shareholders have received a specified percentage of profits in
surplus apart from their fixed dividends.
3. Redeemable preference shares : these are type of shares that
prior claim to dividend before all other preference shares. The
owners of the business can buy back these shares, after
sometimes. The shares are used to finance a given project.
4. Non- cumulative preference shares: this type of shares the
owners do not accumulate from one year to another.
ORDINARY SHARE (HOLDERS): These are shares also known as
equities .The holders are the real owners of the business . They are the
risk bears, they receive their dividend after others shares have been
paid .They can vote be voted for and have no fixed rates of dividend.
RAISING OF CAPITAL
The following methods or ways by which a company raises capital or
issues its shares are:
By prospectus: The company gives (publishes)particulars out as a
prospectus with application form and shares are allotted to those who
apply.
BY OFFER FOR SALE: The company can issue the whole shares to an
issuing house(merchant bank, finance house) and these may offer them
to the public by a document called, ’’offer for sale.’’
BY PLACING: This is a method of raising capital through intermediary
like a firm of stock brokers. The stock brokers will place the issue
among institutional investors (firms).
BY A RIGHT ISSUE: This is when an established company want to raise
further or more capital by offering shares to old shareholders of the
company on favourable terms.
BY INTRODUCTION: This is when a company can apply to stock
exchange for sales of its shares( sales to the public of a new issue of
share) .
TYPES OF CAPITAL : These types of capital available to a company;
Issued capital: This represents the part of the authorized capital offer
to members of the public to subscribe or purchase. When the issued
capital is fully subscribed, it is called Subscribed capital.
Reserved capital: This capital is the part of the not called up, which the
directors have not assumed to be incapable of being called-up capital.
UNCALLED- UP capital is a liability to the company and may be set aside
for future expansion.
Authorized capital (Nominal or Registered capital) : This is highest
amount of capital stipulated in the memorandum of association,
considered to establish and run a company.
Called –up capital: This is the portion of the capital which the
management consider good enough to be called-up on the issued
shares
STOCK : Stocks can be defined as bundled of shares . stocks are not
issued but converted from issued shares .Stock is a collection of shares
into a bundle and is usually fully paid.
DEBENTURE: A debenture is a loan capital, the owner is a creditor to a
company. He receives interest on his capital whether the company
makes profits or not.
DIFFERENCES BETWEEN SHARES SND STOCKS
SHARES STOCK
1.Unit of capital is transferable Mass of capital, any of which is
only in their entirely. transferable
2. Shares are issued. Stocks are converted from
shares issued
3.They are numbered serially Stocks are not numbered
serially
4.Shares may be partly paid. Stocks are always fully paid

DIFFERENCES BETWEEN A DEBENTURE AND SHARES

DEBENTURE SHARES
1.A debenture is a certificate of A share is a unit of capital
indebtedness.
2.It is a loan It is not a loan
3.Holder is a creditor Holder is one of the owner
4.Holder receives interest Holder receives dividend
5.Interest is credited to profit Dividend is credited to
and loss account. appropriation account.
6.The holder receives interest 6.Holder will wait for the
before profit. distribution of profit.
7.Entitled to fixed 7.Entitled to dividends that may
vary with the profits