Equity is the residual claimant or interest of the most junior class of investors in assets, after all liabilities are paid; if liability exceeds assets, negative equity exists. In an accounting context, shareholders' equity (or stockholders' equity, shareholders' funds, shareholders' capital or similar terms) represents the remaining interest in the assets of a company, spread among individual shareholders of common or preferred stock; a negative shareholders' equity is often referred to as a positive shareholders' deficit.
- Dividend paid to shareholders in the form of immediate cash flows.Retained earnings gives benefit in the form of capital gains.
- In case of liquidation, equity share holders will get payment after debt holders,preference shareholders etc.
- No need for security.
- No obligation to pay dividend
- 24/7 customer service
- Form the basis for loans
- Shareholders have right to vote in person or by proxy.
- Euity shares have permanent nature of capital.
- Equity shares gives right to elect board directors of the company.
- Eqity share holder's liability is limited to the investment made on equity shares.
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