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Q: Why does a company return capital to its shareholders?
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Difference between share and share capital?

Shares are units into which the capital of a company is divided. Share Capital is the total amount of money contributed by the shareholders of the company, over which they will have claim at the time of liquidation of the company.


What is nominal share capital?

Nominal share capital is like an authorized share capital. The share capital that the company allowed (the maximum amount) to issue as registered capital when the company is incorporated. It can be changed later by the approval of the shareholders.


How A company gets money from shareholders when?

How A company gets money from shareholders when?


What is a share capital?

This is the sum of money the shareholders pay into which is called the share capital This is the sum of money the shareholders pay into which is called the share capital


Why is share of common stock an asset for its owner and liability for corporation?

A single share is a part of capital of the company so if anybody purchase the share of company that person is investing in the share capital of company and providing the company necessary money to operate that's why it is the investment of the owner of share which is called then the shareholder of company and that shares becomes the asset of the shareholders and while company is acquiring capital in the shape of shares that's why it is the liability of the corporation to pay back that amount of money back to the shareholders at certain time or at liquidation as written in the agreement to raise the capital through share issue.

Related questions

Are shareholders owners of company?

The company is not always the property of the shareholders. The company is in part the property of the shareholders if it is a publicly traded company.


A company is effectively leveraging when?

The return on shareholders' equity exceeds the return on assets


Is capital gain a corporate action?

Yes it is a Corporate Action.The capital gains distribution is the process utilized to remit the proper amount of net gains on capital investments to each of the investment company shareholders that are eligible for a return on their investment.


What is mean by a members of a company?

Members of a company are the shareholders of that company. They are the people who own the company, as they lend their money as the capital for the business.


Difference between share and share capital?

Shares are units into which the capital of a company is divided. Share Capital is the total amount of money contributed by the shareholders of the company, over which they will have claim at the time of liquidation of the company.


What is nominal share capital?

Nominal share capital is like an authorized share capital. The share capital that the company allowed (the maximum amount) to issue as registered capital when the company is incorporated. It can be changed later by the approval of the shareholders.


What is nominal share?

Nominal share capital is like an authorized share capital. The share capital that the company allowed (the maximum amount) to issue as registered capital when the company is incorporated. It can be changed later by the approval of the shareholders.


Why is maximizing shareholders wealth a good philosophy?

Shareholders are actually owners of the company in which they hold stock in. All decisions should be made with the consideration of maximizing shareholders wealth. It is not to just increase the size of the company or to see that executives get rich but rather to maximize the return for shareholders/owners of the corporation.


What is the definition of dividend?

In finance, the word "dividend" refers to a portion of money that is paid at regular individuals by a company to its shareholders. In this way, the shareholders gain a piece of the company's profits.


What is paidup capital?

The amount of a company's capital that has been funded by shareholders. Paid-up capital can be less than a company's total capital because a company may not issue all of the shares that it has been authorized to sell. Paid-up capital can also reflect how a company depends on equity financing.


What is paid capital?

The amount of a company's capital that has been funded by shareholders. Paid-up capital can be less than a company's total capital because a company may not issue all of the shares that it has been authorized to sell. Paid-up capital can also reflect how a company depends on equity financing.


Difference between retained earnings and paid in capital?

Paid in capital is that amount which investor invest in company while retained earning is that portion of profit which is not distributed to shareholders of company.