Question

Equity shareholder is _________.

• A. entitled to dividend at a fixed rate
• B. not entitled to dividend at a fixed rate
• C. entitled to dividend of preference shareholder
• D. all of the above

Answer 1

Answer: (B)

not entitled to dividend at a fixed rate

Equity shares represent the ownership of a company and thus the capital raised by issue of such shares is known as ownership capital or owner's funds. They are referred to as residual owners since they receive what is left after all other claims on the company income and assets have been settled. Therefore, equity shareholders are not entitled to dividend at a fixed rate.