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* Share prices fluctuate a lot, which short term oriented investors find very distressing. * Some companies go broke, and due to the occasional dishonest auditor you won't be able to see it coming. Therefore you need to diversify a lot, though this is easy to do since you can buy small amounts of shares. * Shares require analysis and hard work if you are going to do better than average. If you don't feel you need to do better than average you can buy an index fund or a managed fund and get a diversified basket of shares without any hard work for you. * Shares are a high performance asset class, but there is no positive link between inflation and corporate profits. Higher inflation does not mean higher profits, in fact it may be quite the contrary. In times of high inflation shares may have trouble achieving high returns above the inflationary rate, in these times property may provide superior returns.
Wiki User
∙ 16y ago
Wiki User
∙ 15y agoThe main disadvantage to having ordinary or common shares of a publicly traded company is that, in the event of a bankruptcy, the owner of the common stock is the last in line to receive any payouts. Bond holders and preferred shareholders will be paid back before the common share holders.
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What are the advantages and disadvantages of direct investment in ordinary shares?
Direct investment in ordinary share is less complicated. However, the disadvantage is that the investor is not protected from risk if they invest directly in ordinary shares.
What is the advantages and disadvantages of issue of ordinary shares?
i dont know ask someone else
What is preference share?
Preference shares are shares whose dividends are paid out first before ordinary shares dividends. They so called (preference shares) because they have 'preference' over ordinary shares for payment of dividends.
What are the Two types of shares?
There are different types of shares available. Some examples include ordinary shares, preferred shares, cumulative preference shares, and redeemable shares.
Can ordinary shares divide into two groups?
it depends
Characteristics of ordinary shares?
There are several characteristics of ordinary shares. Some of them include limited liability, liquidation rights, voting and pre-emptive rights among others.
What is redeemable shares?
These are special shares that you get with ordinary shares from some companies, which they buy back off you at a price instead of paying a dividend.
Is ordinary shares a current or non current asset?
Neither, shares are listed under owners equity.
What are the difference between preference share and ordinary shares?
Preference shares have preference over ordinary shares with respect to dividend payments and in the event of liquidation i.e. payments are made to preference share holders before any payments are made to holders of ordinary shares. Preference shares usually carry a fixed dividend amount, are usually callable at the option of the issuing company and generally have no voting rights. They may also have an option for conversion to ordinary shares. Detailed answer here: http://financenmoney.in/types-of-share/
What are Ordinary shares?
Any shares that are not preferred shares and do not have any predetermined dividend amounts. An ordinary share represents equity ownership in a company and entitles the owner to a vote in matters put before shareholders in proportion to their percentage ownership in the company.
What are unissued ordinary shares?
Ordinary shares are also known as equity shares and they are the most common form of share in the UK. An ordinary share gives the right to its owner to share in the profits of the company (dividends) and to vote at general meetings of the company.
Why Ordinary shares as a source of finance?
Well........... Unlike other forms of shares the actual dividends that are paid on ordinary shares will rely on the size of the profit actually made by the company and then the share price can go up or down, and depending on this price depends on how much shareholder gets when he/she sells their shares.
