Question

With reference to Equity Shares, select the odd one out.

• A. Ownership securities
• B. Fixed dividend
• C. Share in residual profits
• D. Participation in management

Hint:

Equity shares provide ownership, a share in profits, and participation in management. However, unlike debt securities, they do not offer a fixed dividend.

Answer 1

The Correct Option is B

Equity shares are a form of ownership in a company and provide the shareholders with several rights. Let's break down the options: - (A) Ownership securities: Equity shares represent ownership in a company, hence this is correct. - (B) Fixed dividend: Unlike debt securities (like bonds), equity shareholders do not receive a fixed dividend. The dividend is variable and depends on the company's profit, making this option the odd one out. - (C) Share in residual profits: Equity shareholders are entitled to share in the residual profits after all expenses and obligations (like fixed dividends on preference shares) have been met. - (D) Participation in management: Equity shareholders have voting rights and can participate in the company's management by electing directors and voting on major company decisions.
Step 2: Conclusion.
Therefore, the odd one out is (B) Fixed dividend because equity shareholders do not receive a fixed dividend.
Final Answer:} Fixed dividend.