What Is a Share Capital?

Ordinary equity is also called ordinary equity, which refers to the equity that shareholders have subscribed for at the par value or set value of ordinary shares.

Common equity

Right!

Ordinary equity is also called ordinary equity, which refers to the equity that shareholders have subscribed for at the par value or set value of ordinary shares.

Ordinary equity includes ordinary shares, capital reserve, retained earnings and reserve capital. The common equity requirements for bank assets and income are after deposits, loans, bond capital and preferred stocks, and are the remaining claims on bank assets and income.

In the priority order of the company's income and assets, common shareholders are ranked behind creditors and preferred shareholders. For example, a company must first pay interest on bonds and loans and dividends on preferred shares before it can distribute dividends to ordinary shareholders. Once the company is wound up and the assets are realised, all creditors and preferred shareholders must be paid off first, and the rest are owned by ordinary shareholders. The company's directors are appointed by shareholders of common stock, one common share representing one unit of voting rights. Common stocks are the most popular securities because they are easy to change hands and the secondary market is active.

1 Zhao Gang, Tie Zhenguo. Business Finance Management. Yunnan Nationalities Publishing House, January 1996.

2 Zhou Haoming. Research on Risk Management of Jincheng Bank. Central South University Press, January 2004, 1st edition. ^[1]