In this article, we will explain to you about the share market and what are the different types of shares.
First, let me clear the difference between share and stock? Basically, a share is a unit of ownership that is issued by any company. There are many different factors that vary the price of shares. Like if when the company grows upwards or if there is any growth happening in the company then the price of the share will increase. If in case you bought a share of the company then you became a shareholder and you can easily sell those shares at the time of profit. If want to be a successful trader and want to make your career in the share market then you can join Best Stock Market Course in Delhi
How many Types of Shares?
Basically, there are two types of shares
1 Equity Shares
2 Preference Share
Now let's discuss about the both types of shares
Equity Shares- The other name of equity share is ordinary shares. Inequity shares the ownership of a company are directly given to the shareholder or buyer. The shareholders of these shares have to bear the highest risk after investing their money. Also, owner of these shares has voting rights in any company decision.
2 Preference Shares- Now the second types of share are Preference Shares. In this type of share at the time of liquidation, the shareholder will get the invested amount first. Also, they have the right to get the amount of profit as an ordinary shareholder.
Now let's discuss some different types of Preference Shares
1 Cumulative Share- In this type of preference share if in the first year the company did not announce the dividends in the first year then it will carry forward towards the next year, and in the next year when at any time company earn a profit than in the last year profit will be divided first.
2 Non-Cumulative Preference Shares- In this type of preference share the part of the dividend did not get accumulated, in simple words, we can say that there is no profit in future and nothing to pay in terms of dividends.
3 Convertible Preference Share- In these types of shares there is an option for the shareholders that they can easily convert their shares into ordinary or equity shares. For doing this there are some important and basic terms and conditions which must have to follow.
4 Non- Convertible Preference Shares- On the other hand these types of shares are just the opposite of convertible shares. These shares can't be changed or converted into equity shares.
5 Redeemable Preference Share- Issuing and repurchasing of these types of shares can be done easily. Also, this can be done at a predetermined time and at a predetermined price.
Hope this article will surely help you to get the knowledge about what is shared and what are its different types. Read this article and get complete knowledge regarding share and its types.
