what is share? explain various types of shares
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WHAT IS A SHARE?
In financial markets, a share is a unit of account for various investments. It often means the stock of a corporation, but is also used for collective investments such as mutual funds, limited partnerships, and real estate investment trusts.
TYPES OF SHARES
1. Ordinary Shares
Ordinary share capital is the capital that is received or given by the owners of a business in exchange for shares.
2. Preference Shares
Preference shares typically carry a preferential right to a fixed dividend and usually rank higher than other share classes in the event of a winding up.
3. Redeemable Shares
Provided a limited company's articles permit, a company may issue shares which can be redeemed by the company at their nominal value at some stated date in the future or at the directors' discretion, provided that there are sufficient distributable profits available.
4. Founder Shares
These are sometimes issued to the founders of a company and usually carry enhanced rights over other classes of shares, such as increased voting rights or an entitlement to surplus profits over a specified period.
5. Deferred Shares
Deferred shares commonly carry few rights. As their rights are deferred to the ordinary shares they usually carry no right to vote or participate in a distribution.
In financial markets, a share is a unit of account for various investments. It often means the stock of a corporation, but is also used for collective investments such as mutual funds, limited partnerships, and real estate investment trusts.
TYPES OF SHARES
1. Ordinary Shares
Ordinary share capital is the capital that is received or given by the owners of a business in exchange for shares.
2. Preference Shares
Preference shares typically carry a preferential right to a fixed dividend and usually rank higher than other share classes in the event of a winding up.
3. Redeemable Shares
Provided a limited company's articles permit, a company may issue shares which can be redeemed by the company at their nominal value at some stated date in the future or at the directors' discretion, provided that there are sufficient distributable profits available.
4. Founder Shares
These are sometimes issued to the founders of a company and usually carry enhanced rights over other classes of shares, such as increased voting rights or an entitlement to surplus profits over a specified period.
5. Deferred Shares
Deferred shares commonly carry few rights. As their rights are deferred to the ordinary shares they usually carry no right to vote or participate in a distribution.
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