Question

Why equity shareholders are known as risk bearers?

Answer 1

solution:-

because rate of dividend on equity shares is not certain and equity shareholders are paid dividend after paying to preference shareholders .in the event of winding up of the company , equity shareholders are paid back capital only after paying to the preference shareholders .it can , therefore ,be said that the maximum risk is borne by equity shareholders.$\setlength{\unitlength}{0.8 cm}}\begin{picture}(12,4)\thicklines\put(4,1){ . }\put(6,6){\line(1,0){3}}\put(6,6){\line(-3,-2){1}}\put(9.02,6){\line(3,-2){1}}\put(5,5.32){\line(-1,0){1}}\put(10,5.32){\line(5,-1){1.5}}\put(11.5,5.02){\line(0,-1){0.7}}\put(4,5.32){\line(0,-1){1}}\put(4,4.32){\line(1,0){1}}\put(11.5,4.32){\line(-1,0){1.34}}\put(5.82,4.32){\line(1,0){3.4}}\put(5.4,4.32){\circle*{1.2}}\put(5.4,4.32){\circle{0.9}}\put(9.7,4.32){\circle*{1.2}}\put(9.7,4.32){\circle{0.9}}\put(6,5.3){\line(0,1){0.5}}\put(6,5.3){\line(-1,0){0.7}}\put(6,5.8){\line(-3,-2){0.7}}\put(7.2,5.3){\line(0,1){0.5}}\put(7.2,5.3){\line(-1,0){1}}</p><p>\put(6.2,5.3){\line(0,1){0.5}}\put(6.2,5.8){\line(1,0){1}}\put(8.4,5.3){\line(0,1){0.5}}\put(8.4,5.3){\line(-1,0){1}}\put(7.4,5.3){\line(0,1){0.5}}\put(7.4,5.8){\line(1,0){1}}\put(8.6,5.3){\line(0,1){0.5}}\put(9.7,5.3){\line(-1,0){1.1}}\put(9,5.8){\line(3,-2){0.7}}\put(8.6,5.8){\line(1,0){0.41}}\put(6.2,4.5){ K }</p><p>\put(6.55,4.5){ u }\put(6.85,4.5){ s }\put(7.10,4.5){ p }\put(7.37,4.5){ r }\put(7.60,4.5){ e }\put(7.83,4.5){ e }\put(8.08,4.5){ t }\put(6.4,5.4){ l }\put(6.6,5.4){ i }\put(6.75,5.4){ m }\put(7.45,5.4){ o }\put(7.70,5.4){ u }\put(7.97,5.4){ s }\put(8.17,5.4){ i }\put(8.7,5.4){ n }\put(8.97,5.4){ e }\end{picture}$

Answer 2

The equity shareholders of known as risk barriers because rate of dividend on equity share is not certain and equity shareholders or paid after paying to preference shareholders in the event of winding up of the company equity shareholders or paid back capital only after going to the preference.