Benefits of Shareholders

Welcome to today’s class!!

We are thrilled to have you in our class!!

In today’s Store Management class, we will be learning about Benefits of Shareholders

Benefits of Shareholders

benefits of shareholders

A Shareholder is a person, company, or institution that owns at least one share of a company’s stock or in a mutual fund. Shareholders essentially own the company, which comes with certain rights and responsibilities. This type of ownership allows them to reap the benefits of a business’s success.

These rewards come in the form of increased stock valuations or financial profits distributed as dividends. Conversely, when a company loses money, the share price invariably drops, which can cause shareholders to lose money or suffer declines in their portfolios.

Here are things to note about a Shareholder:

  • A shareholder is any person, company, or institution that owns shares in a company’s stock.
  • A company shareholder can hold as little as one share.
  • Shareholders are subject to capital gains (or losses) and/or dividend payments as residual claimants on a firm’s profits.
  • Shareholders also enjoy certain rights such as voting at shareholder meetings to approve the members of the board of directors, dividend distributions, or mergers.

Shareholders have the potential to profit from a rising share price and  the potential to earn an income from dividend payments. Shareholders also have a range of other rights and benefits. Although, they differ slightly depending on whether you own ordinary shares or preference shares.

Some Benefits of Shareholders Are:

 Ordinary Shareholder are able to

  • Participate in annual general meetings and vote on the election of directors to a company’s board
  • Access relevant company information such as reports
  • Receive dividends (should the company pay them) and participate in dividend reinvestment plans (if offered by the company)
  • Participate in corporate actions such as share or rights issues (if offered)

While preference shareholder are generally entitled to:

  • Priority of being repaid if the company should go out of business
  • Fixed dividend amount 

In summary, Shareholders essentially own the company, which comes with certain rights and responsibilities. This type of ownership allows them to reap the benefits of a business’s success.

 

Evaluation

What is a Share?

 

Reading Assignment

Who is a Shareholder?

 

Weekend Assignment

Identify five benefits of Ordinary and Preference Shareholders.

 

We hope you enjoyed today’s class. In our next class, we will be focusing on Revision. 

Let us know your thoughts and questions in the comment section, and we will attend to them as fast as we can.bene

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