Question : Which of the following is not a characteristic of equity shares?
Option 1: Voting rights
Option 2: Fixed dividend
Option 3: Residual claim on assets
Option 4: Higher risk
Answer (1)
23rd Jan, 2024
Correct Answer:
Fixed dividend
Solution : The correct answer is (b) Fixed dividend.
Equity shares, also known as common shares or ordinary shares, represent ownership in a company. Fixed dividend is not a characteristic of equity shares. Unlike preference shares, equity shares do not have a fixed dividend rate. Dividends on equity shares are usually declared by the company's board of directors and are subject to the company's profitability and available funds.
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