one ordinary shares the most common type of shares are known as ordinary shares purchasing ordinary shares gives the owner of stake in the company and an entitlement to dividends dividends are the part of the company's profits that are paid out to the shareholders every six months when the company is making a profit most ordinary shares also give the shareholder a right to attend the company's Annual General Meeting and vote on issues relevant to the company's future to preference shares preference shares return a fixed dividend to the investor that is not linked to the company's annual profit result although preference shareholders receive dividends before ordinary shareholders they do not receive the same voting rights as ordinary shareholders three contributing shares contributing shares of those that have not been fully paid for and require further payment in the future dividends are generally paid according to the proportion of the paid up amount for bonus issues a bonus issue is a free issue of new shares to existing shareholders every now and then when a company makes an extraordinary profit or if it is amassed accumulated profits over a period of time it gives its shareholders a present of a bonus issue of shares at no cost receiving a bonus issue does not increase the proportion of a company owned by the shareholder as all shareholders receive the same present in proportion to their ownership of the company it is in effect a cashless dividend five rights issues a rights issue is also an issue of new shares to existing shareholders however these are not free a rights issue occurs when a company needs to raise extra capital and it gives its shareholders our right but not an obligation to purchase extra shares there are two types of rights issues renowned scible and non renowned civil rights pronounceable rights can be traded on the share market if an existing shareholder does not wish to purchase the new shares being offered to them they are therefore of some value to the shareholder a little bonus non renowned scible rights cannot be traded or sold to others so if the shareholder does not take up their right to buy the new shares by a particular date the writer of no value to them so those are the five main types of shares in general when we refer to shares in this and other training modules we are talking about ordinary shares you
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