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Question
Equity shareholders are real owners and controllers of the company
Solution
This statement is True.
- Equity shareholders are the joint owners of the company. They have ownership rights in the company. They have the right to participate in the management of the company.
- Since, equity shareholders accept the business risks in a real sense, they are the real owners of the company.
- The control of the company is vested in equity shareholders. This is because they have exclusive voting rights.
- Equity shareholders do not have special preferential rights either as to dividend and return of capital in the event of winding – up of the company. They have the risk of having nothing or have the chances of earning attractive dividend at an increasing rate.
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