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प्रश्न
Answer the question.
Explain the advantages of equity shares, as a source of finance.
उत्तर
Advantages of equity shares are:
- Equity shares impose no burden on the company resources because the dividend is payable only at the discretion of the management.
- The liability of equity shareholders is limited to the face value of shares subscribed by them.
- A company with substantial equity capital commands prestige in the investment market.
- Equity shareholders have the pre-emptive right to subscribe to new shares issued by the company.
- The face value of an equity share is generally low.
- The value of an investment in equity shares may increase manifold during the boom and prosperity of the company-holders of these shares earn capital gains.
- Equity shares do not create any charge on the assets of the company.
- Shareholders are not required to pay income tax on dividends received from the company.
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संबंधित प्रश्न
Jain Motors Ltd. converted its 200, 8% debentures of Rs 100 each issued at a discount of 6% into equity shares of Rs 10 each, issued at a premium of 25%. Discount on issue of 8% debentures has not yet been written off.
Showing your working notes clearly pass necessary Journal Entries on conversion of 8% debentures into equity shares.
A person who purchases shares of a company is known as _______ of the company.
Shares which are redeemed after a certain period of time.
Long Answer Question
What do you mean by the term ‘share’? Discuss the type of shares, which can be issued under the Companies Act, 2013 as amended to date.
The Adersh Control Device Ltd was registered with the authorised capital of Rs 3,00,000 divided into 30,000 shares of Rs 10 each, which were offered to the public. Amount payable as Rs 3 per share on application, Rs 4 per share on allotment and Rs 3 per share on first and final call. These share were fully subscribed and all money was dully received. Prepare journal and Cash Book.
Discuss the process for the allotment of shares of a company in case of over subscription.
'Amrit Dhara Ltd.' issued 800 Equity Shares of ₹ 100 each at a premium of 25% as fully paid-up in consideration of the purchase of plant and machinery of ₹ 1,00,000.
Pass entries in company's Journal.
Distinguish between equity shares and preference shares.
Which is not true about Preference Shares?
What are preference shares?
