What do you mean by owned capital ? Explain in detail advantages of Equity shares, Hire purchasing.
Answers
Meaning:The funds collected by a company through issue of equity shares and preference shares and plough back of profit are called owned capital.
advantages of hire Purchase:
The most obvious benefit for a company in using a hire purchase plan is it does not have to pay the full amount of the purchase up front. This can be very beneficial for a company that needs to obtain expensive equipment but does not have the necessary capital and does not want to increase its debt burden by borrowing money.
advantages of equvity shares:
all the holders of this shares ate the company members and they have all rights to vote.it has captal gain,limited liability,exercise control,claim over assets and income,rights shares and bonus shares
Meaning of Owned capital, advantages of Equity shares and Hire purchasing.
Explanation:
Meaning of owner's capital- Owner's capital as the name itself suggests is the capital brought by the owner in the business, in other words it is the stake of owner involved in the business.
Advantages of equity share-
- Equity share are easily transferable.
- the equity shareholder gets voting rights.
- shareholders get participation in decision making
- high return is provided in form of dividend
Advantages of hire purchase-
- the company can make immediate use of assets without paying the full value for the asset.
- Company with limited budget can get access to expensive assets.
Learn more:
Equity share- meaning, advantages and limitations
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