GENERAL QUESTIONS What are Equities?
Equities are pieces of a company, also known as “stocks or shares”. When you buy shares of a company, you’re basically purchasing an ownership interest in that company. A company’s stockholders or shareholders all have equity in the company, or own a fractional portion of the whole company. They buy the shares because they expect to profit when the company profits. Companies issue two basic types of shares: equity and preference shares. A. Equity Shares Both public and private corporations can issue common shares. Equity shareholders are the owners of a company and initially provide the equity capital to start the business. Equity share ownership in a public company offers many benefits to investors. The following are some of its main advantages: • Capital appreciation • Dividends • Voting privileges • Marketability – shares can easily be bought or sold • Dividend tax credit and capital gains tax There are also a few drawbacks to owning equity shares. Although part owner of the busines
