Equity shareholders are ________of a companya)Bankersb)Creditorsc)Debtorsd)OwnersCorrect answer is option 'D'. Can you explain this answer?

Question

Answer

Equity shareholder give the money with risk as like normal owner of proprietor. for company, this money is working capital and company work with this on day to day business. so, this money is like a owner so equity shareholder are owner of the company .

Answer

Do you know what is mean by equity ? ok am telling you equity is come from Latin word equate which means equal . and in business we often say partner is a partner and labour is servent equity means owner equity is a word that indicates that you can take decision so you can say that equity shareholders are the owners of business or even a company

Answer

Equity shareholders are owners of a company.

Equity shareholders are individuals or entities who hold shares in a company. They are the owners of the company and have a claim on the company's assets and earnings. Here's why equity shareholders are considered owners of a company:

1. Ownership:
Equity shareholders have ownership rights in the company. When they buy shares, they acquire a portion of the company's ownership. They are entitled to vote on important matters, such as the appointment of directors, changes in the company's constitution, and major business decisions. They have the power to influence the company's operations and strategic direction.

2. Profit Sharing:
Equity shareholders are entitled to a share in the company's profits. When a company earns profits, it can distribute a portion of it as dividends to its shareholders. Equity shareholders receive dividends in proportion to their shareholding. This profit-sharing aspect reflects their ownership status in the company.

3. Residual Claim:
Equity shareholders have a residual claim on the company's assets. In the event of liquidation or winding up of the company, equity shareholders have the right to claim the remaining assets after all other obligations, such as debt repayment and preference share dividends, are settled. This residual claim further emphasizes their ownership in the company.

4. Risk and Rewards:
Equity shareholders bear the risk and enjoy the rewards associated with the company's performance. They are exposed to the fluctuations in the company's profitability and share price. If the company performs well, the value of their shares increases, and they can benefit from capital gains. Conversely, if the company performs poorly, they may suffer losses.

Conclusion:
Equity shareholders are the true owners of a company. They hold the power to make decisions, share in the company's profits, claim the remaining assets, and bear the risks associated with ownership. Their ownership status distinguishes them from other stakeholders such as creditors, debtors, and bankers, who have different roles and interests in the company.

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