3.1 PP7 - Role of shareholders Flashcards
Why may share holders be known as the owners of a company?
they each own shares of stock in the corporation
Where are stock and shares sold?
on the stock exchange
What is a dividend?
a distribution of a company’s profit to its shareholders
What does ordinary share represent?
represents an ownership in the company and a claim to a portion of their profits.
what is ordinary share capital?
the total of all the ordinary shares sold by a business
What is a preference share?
a share which entitles the holder to a fixed dividend, whose payment takes priority over that of ordinary share dividends.
Why may a share holder invest? (2 points)
1) Maximise return from their investment - encouraging business to maximise short term profits and get a big dividend.
2) To increase influence in a business to build up a stake and get more control over a business.
What is a dividend?
a sum of money paid regularly to its shareholders
