Anika ltd. is a company manufacturing school bags for students. Like past few decades of consistent profits earnings, this year too,

Question

Read the following case and answer the question given: 

Anika ltd. is a company manufacturing school bags for students. Like past few decades of consistent profits earnings, this year too, it has been able to generate enough profits and distribute 70% dividends as there is sufficient availability of cash with the company. Ms Anika Bhardwaj, the chairperson of the group, has received ‘thanks emails’ from a large number of shareholders, for excellent returns on their investments. 

Ms. Sumitra is one of such shareholders, who has written to the management for the returns on her investments. 

Which type of shares Ms. Sumitra holds? State any three features of such shares.

Answer 1

Equity Shares 

Features of Equity shares: 

(a) Equity share capital serves as permanent capital as it is to be repaid only at the time of liquidation. 

(b) Payment of dividend is not compulsory. 

(c) Funds can be raised through equity shares without creating charge on the assets of the company.