Ordinary shares are also known as

Q: Ordinary shares are also known as

Ordinary shares are also known as equity ✓ loan net worth reserve Explanation Ordinary shares are also known as equity shares or common shares. They represent ownership in a company and give shareholders voting rights and a share of profits through dividends. The term "equity" is used because these shares represent the owners' stake in the company. Equity literally means ownership interest. Shareholders are the true owners of a company, unlike creditors who are merely lenders. Ordinary shares differ from preference shares in that dividends are not fixed - they depend on company profits and board decisions. Ordinary shareholders are last to be paid in liquidation but have unlimited upside potential if the company prospers. Loans represent borrowed money, not ownership. Net worth is the total value of equity, not the shares themselves. Reserves are accumulated profits kept in the business. Equity correctly describes the ownership nature of ordinary shares.

Question

Answer 1

Ordinary shares are also known as

equity ✓
loan
net worth
reserve

Explanation

Ordinary shares are also known as equity shares or common shares. They represent ownership in a company and give shareholders voting rights and a share of profits through dividends.

The term “equity” is used because these shares represent the owners’ stake in the company. Equity literally means ownership interest. Shareholders are the true owners of a company, unlike creditors who are merely lenders.

Ordinary shares differ from preference shares in that dividends are not fixed – they depend on company profits and board decisions. Ordinary shareholders are last to be paid in liquidation but have unlimited upside potential if the company prospers.

Loans represent borrowed money, not ownership. Net worth is the total value of equity, not the shares themselves. Reserves are accumulated profits kept in the business. Equity correctly describes the ownership nature of ordinary shares.