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Equity Investment – Part I
Key Features of an Equity Share
Equity is stock representing ownership interest in a company.
- Democratic claim to Earnings – A shareholder has a proportionate ownership claim to the company. The benefits of ownership, such as dividends, rights, bonus etc. is same for all the shareholders, except that the majority shareholders get to manage the business as well. No shareholder, however can be asked to pay for the losses incurred by company.
- Transferability of ownership interest – Price discovery is on stock exchange platform via interplay of demand & supply forces.
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