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Shares & Its Types

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29 views

Shares & Its Types

Uploaded by

pawanithape1
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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SHARES

What is Share
A share is referred to as a unit of ownership
which represents an equal proportion of a
company's capital. A share entitles the
shareholders to an equal claim on profit and
losses of the company.
SHARES

• SHARES ARE EQUITY FINANCIAL INTRUMENT

• THEY ARE RISKIER ASSET AS COMPARE TO OTHER ASSET , LIKE


REAL ESATE . DEPOSITS ,BONDS , GOLD
TYPES OF SHARES
• There are majorly two kinds of shares i.e.

• Equity shares and preference shares.


Difference Between Equity Share And Preference Share

• What Is The Difference Between Equity Share And Preference


Share?
• Both represent ownership capital and entitles you to have a claim on
the company’s profit in the form of a dividend, announced by the
corporate. When profit share is announced, preference shareholders
have the first claim. They receive their bonus at a fixed rate but don’t
enjoy voting rights in the majority of companies like equity
shareholders do.
Difference Between Equity Share And Preference Share

• When we talk about investing in stocks, we usually


refer to equity shares, which are also called general
shares. With this, a company offers you partial
ownership in the company and therefore, it involves
high risk. Profit on equity shares depends on the
company’s performance. And so, your dividend
percentage will also fluctuate, which means you might
not receive any dividend at times. But with preference
shares, the company is bound to pay the dividend.
Difference Between Equity Share And Preference Share

• Secondly, risks of an equity shareholder are the


same as what the company experience. As
compared to them, risk exposure of preference
shareholders is nominal. So, they also have a
preferential claim on receiving their capital back
before the company settles its general
shareholders.
Difference Between Equity Share And Preference Share
BONDS
• A bond is a fixed income instrument that
represents a loan made by an investor to a
borrower (typically corporate or
governmental). ... Bonds are used by
companies, municipalities, states, and
sovereign governments to finance projects
and operations. Owners of bonds are
debtholders, or creditors, of the issuer.
DIFFERNCE BETWEEN SHARES & DEBENTURES
DIFFERNCE BETWEEN BONDS &
DEBENTURES
TYPES OF SHARES
• Classification Of Equity Shares based on Definition
• Here is a look at the equity share classification based on the definition:
• Bonus Shares: Bonus share definition implies those additional stocks
which are issued to existing shareholders free-of-cost, or as a bonus.
• Rights Shares: Right shares meaning is that a company can provide
new shares to its existing shareholders - at a particular price and
within a specific period - before being offered for trading in stock
markets.
TYPES OF SHARES
• Sweat Equity Shares: If as an employee of the company, you have
made a significant contribution, the company can reward you by
issuing sweat equity shares.
• Voting And Non-Voting Shares: Although the majority of shares
carry voting rights, the company can make an exception and issue
differential or zero voting rights to shareholders.
TYPES OF SHARES
• Convertible/Non-Convertible Preference Shares: Convertible
preference shares can be converted into equity shares, after meeting
the requisite stipulations by the company’s Article of Association
(AoA), while non-convertible preference shares carry no such
benefits.
• Redeemable/Irredeemable Preference Share: A company can
repurchase or claim redeemable preference share at a fixed price and
time. These types of shares are sans any maturity date. Irredeemable
preference shares, on the other hand, have no such conditions.

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