CAT / FIA FFM Syllabus C. Managing Cash Balances - Equity - Notes ^{9 / 13}

Ordinary shares carry no right to a fixed dividend but ordinary shareholders are entitled to all profits.

In fact, the amount of ordinary dividends fluctuates from year to year.

Ordinary shareholders are sometimes referred to as equity shareholders.

Rights of Ordinary shareholders:

1. Shareholders can attend company general meetings.

2. They can vote on company matters such as:

   - the appointment or re-election of directors
   - the appointment of auditors

3. Ordinary shareholders are the effective owners of a company. 

   They own the 'equity' of the business including any reserves of the business.

4. They are entitled to receive dividends

5. They will receive the annual report and accounts

Equity finance

• is raised through the sale of ordinary shares to investors.

Liquidation

• The ordinary shareholders are the ultimate bearers of risk as they are at the bottom of the creditor hierarchy in a liquidation.

  This means that they might receive nothing after the settlement of all the company's liabilities.