What are Equity Shares?

 What are Equity Shares?

What are Equity Shares?

Capitaux props les actions, également appelles action ordinaires, represent the ownership of an enterprise. Investors should be mindful of the actions of participating, as they are owned by the Society and have certain losses, being the voters who carry out the Society's decisions and receive dividends. The actions taken due to the lack of capital and capital appreciation potential suggest that an additional action is allowed for the benefit of your actions, in order to develop the enterprise and obtain profit, a reward and level of Plus, which provides you with other benefits. Les actions fournissants égalements de la liquidity, car als puvent etre achiettes et vendues sur les bourses publiques. Furthermore, I am informed about the risks, the volatility in the march and the possible outcomes for a venture to be achieved or fail. Despite some risks, at least the actions drive investment popularity and prompt institutions to seek opportunities for croissants in late March.

Features of Equity Shares

•          They bear the highest risk as they are the owners of the company.

•          They can be transferred from one person to another with or without any consideration.

•          They are permanent in nature.

•          The rate of dividend is not fixed for equity shareholders.

•          They manage the affairs of the company.

      Let us now have a look at some of the advantages of equity shares.

Advantages of Equity Shares from Company’s Point of View

From a company's perspective, stocks offer several benefits:

1. Permanent Capital: Shares represent the permanent capital of the company. Against of Loan, which requires periodic payment of interest and prospective repayment of principal,Equity financing does not impose any repayment obligation. It provides A business with greater financial flexibility and reduced risk of bankruptcy due to debt obligation.

2. No obligation to pay dividends: Unlike debt financing, where interest is paid The company's profitability, regardless of shareholders, should be Entitled to dividends only if the company makes profits and the board of directors Decides to distribute them. This flexibility allows the company to maintain its profits During periods of low profitability or when reinvestment in the business makes sense Beneficial.

3. Better financial ratios: Equity financing does not involve interest costs Can improve the financial performance of the company such as debt ratio and interest coverage ratio. This can improve the company's reputation and attractiveness Investors and Lenders.

4. Alignment of interests: Shareholders become co-owners and share in the company In his success. It is the alignment of interests between shareholders and management Encourages decision making that maximizes shareholder value in the long term.

5. Attractiveness to investors: Stocks can make a company more attractive to investors. Investors, especially those looking for property and potential capital appreciation. By offering shares, the company can reach a wider group of investors Potentially lower cost of capital compared to debt financing.

6. Business expansion potential: Equity financing can provide the business Capital required for expansion, research and development, acquisitions or other strategic initiatives. This could boost growth and help the company raise new capital  Opportunities in the market. 

Overall, stocks provide many benefits to businesses including permanent capital,Financial flexibility and alignment with shareholders' interests. taking advantage Equity financing, companies can strengthen their financial position, support growthInitiative and create value for shareholders in the long term.