What is a shareholder's agreement?
Answers
Answer:
A shareholder, also referred to as a stockholder, is a person, company, or institution that owns at least one share of a company’s stock, which is known as equity. Because shareholders are essentially owners in a company, they reap the benefits of a business’ success. These rewards come in the form of increased stock valuations, or as financial profits distributed as dividends. Conversely, when a company loses money, the share price invariably drops, which can cause shareholders to lose money, or suffer declines in their portfolios’ values.
Explanation:
KEY TAKEAWAYS
♦ A shareholder, also referred to as a stockholder, is any person, company, or institution that owns at least one share of a company’s stock.
♦ As equity owners, shareholders are subject to capital gains (or losses) and/or dividend payments as residual claimants on a firm's profits.
♦ Shareholders also enjoy certain rights such as voting at shareholder meetings to approve things like board of directors members, dividend distributions, or mergers.