Skip to main content

Translate

Equity Shares

Equity Shares

it’s a very common form of shares and first choice for most of the investors. They have full right over surplus profit on winding up of the company after preference shares and creditors. In the matter of dividend, directors have sole right to decide whether equity share holders receive dividend or not? It’s directors choice. The fortune of the equity shareholders is tied up with the ups and downs of the company that reflect on its share price. Equity share holder earn by buying and selling of that shares. It is also known as the “Risk Capital” because if company fails then holders of these shares may end up with nothing in their hands.
Equity shares are of two kinds. These are–

  1. Equity Shares with Voting Rights:- the holders of any such equity shares have normal voting rights on every resolution placed before the company at any general meeting, his voting right on a poll shall be in proportion to his shares of the paid up equity capital of the company.
  2. Equity Shares with Differential Rights:-The holders of any such shares shall have differential rights as to dividend, voting or otherwise in accordance with such rules and subject to such conditions as may be prescribed by the Central Government.

Comments

Popular posts from this blog

My Investments and COVID-19

Everyone has witnessed huge market decline in the month of March when our PM Narendra Modi suddenly announced lockdown to tackle covid pandemic. Sensex stock market index reached all time high of 42273.87 in January of 2020 and from there it fallen down to below 26000 pts, nearly 40 % down. And from there it started healing. My Investments and COVID-19 Before this great fall my all investments were in undervalued stocks with very low P/E multiple, attractive earnings and exciting track record. Thanks to this quality stocks my own portfolio fall nearly 22 %. Although my 22% of capital vanished, I feel very delighted my portfolio beaten the market index(Sensex down nearly 40%) with significant points.  In the last year of your college generally you are not backed with huge capital support, and your capital is very limited. So securing capital is my first priority. Back on the track, I sold all the stocks with 22 % capital loss and secured rest of the principle capital

Why some investors give stocks so high PE?

PE ratio also known as Price to Earning ratio and the most popular ratio among the investors. They use this to identify undervalued or overvalued stocks.  we already covered what is PE ratio and how you can utilize this ratio, if you want to learn about this then simply click here . The very basic logic behind PE is, If earnings low then PE high and If earning high then PE low. In general parlance if stocks PE high then it considered as overvalued and if stock comes with low PE then it considered as undervalued. Generally people avoid investing in stocks with high PE but everything comes with exceptions.  Stocks with high PE means "people and investors are willing to pay high prices for low earning stocks". Why people or investor doing so ? there can be various reason behind this, after all its a stock market and everyone have their own perception. Reasons can vary person to person. There can be various reason for paying high PE stocks and one reason can be,  Investors are ve

Important ratios for stock analysis

Important ratios for stock analysis PE ratio:- PE ratio also known as the price to earning ratio and very famous between the investors. Investors use this ratio with other ratios or data to find out undervalued stocks. Read more Important ratios for stock analysis Earning per share:- In simple meaning it means “distribution of company’s profit between each shares” it can be used as the indicator for determining company’s profitability. It is best to use PE ratio and Earning per share comparatively. Return on Assets:- Is company using its assets effectively to generate income, yes or not? This ratio tells us the truth. This ratio gives us idea about management efficiency or capability to run company profitably. It compares company’s earnings as compare to its assets Dividend payout ratio:- It means “amount of dividends paid to stockholders relative to the amount of total net income of a company” Dividend payout ratio = Dividends / Net Income. Retention Ratio:- What c