An equity share is an ownership stake in a corporation. It is also called common stock or ordinary shares. In some countries outside the United States, the term ordinary share is used instead of the more common term equity share. Commonwealth realms generally refer to equity shares as ordinary shares. There are many different uses for common stock.
Equity shares give shareholders the right to vote in major decisions of the company. They also have preferential treatment and may receive bonus shares from the company. There are four types of equity shares. Each one provides the investor with unique advantages and disadvantages. Equity shares are a great option for investors who are comfortable with risk. However, it is important to note that the risk involved in an equity investment should be proportionate to the amount you are prepared to bear.
Equity shares are a good choice for investors who are looking for high returns over the long term. These investments are also tax-efficient and secure, making them an attractive option for investors. In addition, they are highly liquid, meaning they can be sold and bought at any time of the day. While equity shares carry risk, they are relatively low.
The value of equity shares is dependent on a company’s performance. As owners of the shares, you stand to gain or lose from profits and losses, as you have a voting right in the company. Equity shares are a popular investment strategy, offering much higher returns than fixed income investments.