Question

Write two characteristics of equity shares.

Hint:

Equity shareholders have voting rights and participate in the company’s profits, but they also face the risk of capital loss.

Answer 1

Step 1: Definition of equity shares.
Equity shares represent ownership in a company. They entitle shareholders to a share in the company’s profits and decision-making processes.
Step 2: Characteristics of equity shares.
1. **Ownership Rights:** Equity shareholders are the owners of the company and have the right to vote in the general meetings of the company. 2. **Risk and Return:** Equity shareholders have the potential for high returns in the form of dividends and capital appreciation, but they also bear the risk of losing their capital if the company faces financial difficulties.
Step 3: Conclusion.
Thus, equity shares offer ownership and provide a share in the company’s success or failure. Final Answer: \[ \boxed{\text{1. Ownership rights, 2. Risk and return}} \]