Commerce Exam > Commerce Questions > ______ Shares are not convertible.a)Convertib...
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______ Shares are not convertible.
- a)Convertible Preference Shares
- b)Equity Shares
- c)Preference Shares
- d)Both Preference Shares and Convertible Preference Shares
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
______ Shares are not convertible.a)Convertible Preference Sharesb)Equ...
Equity shares are also known as ordinary shares. They are the form of fractional or part ownership in which the shareholder, as a fractional owner, takes the maximum business risk. The holders of Equity shares are members of the company and have voting rights. Equity shares are the vital source for raising long-term capital.
Equity shares represent the ownership of a company and capital raised by the issue of such shares is known as ownership capital or owner’s funds. They are the foundation for the creation of a company. they are not convertible.
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______ Shares are not convertible.a)Convertible Preference Sharesb)Equ...
Equity Shares
Equity shares, also known as ordinary shares, are the most common type of shares issued by a company. These shares represent ownership in the company, and shareholders are entitled to voting rights and a share in the company's profits. Unlike preference shares, equity shares do not have any fixed dividend rate, and their dividends are paid out of the company's profits.
Non-convertible feature
Equity shares are not convertible, which means that they cannot be converted into any other type of shares. This feature is in contrast to convertible preference shares, which can be converted into equity shares at a later date.
Benefits
There are several benefits of investing in equity shares, including:
1. Potential for higher returns: Equity shares have the potential to offer higher returns compared to other types of investments, such as fixed deposits or bonds.
2. Liquidity: Equity shares are listed on stock exchanges, which means that they can be easily bought and sold. This makes them a liquid investment.
3. Ownership: As mentioned earlier, equity shares represent ownership in the company. This gives shareholders a say in the company's decision-making process.
4. Diversification: Investing in equity shares can help in diversifying one's investment portfolio, which can help in reducing risk.
Conclusion
In conclusion, equity shares are the most common type of shares issued by companies, and they represent ownership in the company. They are not convertible, which means that they cannot be converted into any other type of shares. Investing in equity shares can offer several benefits, including potential for higher returns, liquidity, ownership, and diversification.
Equity shares, also known as ordinary shares, are the most common type of shares issued by a company. These shares represent ownership in the company, and shareholders are entitled to voting rights and a share in the company's profits. Unlike preference shares, equity shares do not have any fixed dividend rate, and their dividends are paid out of the company's profits.
Non-convertible feature
Equity shares are not convertible, which means that they cannot be converted into any other type of shares. This feature is in contrast to convertible preference shares, which can be converted into equity shares at a later date.
Benefits
There are several benefits of investing in equity shares, including:
1. Potential for higher returns: Equity shares have the potential to offer higher returns compared to other types of investments, such as fixed deposits or bonds.
2. Liquidity: Equity shares are listed on stock exchanges, which means that they can be easily bought and sold. This makes them a liquid investment.
3. Ownership: As mentioned earlier, equity shares represent ownership in the company. This gives shareholders a say in the company's decision-making process.
4. Diversification: Investing in equity shares can help in diversifying one's investment portfolio, which can help in reducing risk.
Conclusion
In conclusion, equity shares are the most common type of shares issued by companies, and they represent ownership in the company. They are not convertible, which means that they cannot be converted into any other type of shares. Investing in equity shares can offer several benefits, including potential for higher returns, liquidity, ownership, and diversification.
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Community Answer
______ Shares are not convertible.a)Convertible Preference Sharesb)Equ...
A)convertible preference shares are one type of preference shares which can be convertible b) Equity is permanent capital, you can reduce it by buy-back and then reissue as preference, but it cannot be converted in preference share. it will amount to reduction of capital hence we have to follow provisions of sec 77 and 100.so, equity shares can not be convertible so option B is correct
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______ Shares are not convertible.a)Convertible Preference Sharesb)Equity Sharesc)Preference Sharesd)Both Preference Shares and Convertible Preference SharesCorrect answer is option 'B'. Can you explain this answer?
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