shares and its types in Pakistan

3. •One of the equal parts into which a company's capital is
divided, entitling the holder to a proportion of the profits.
•Share is a document that represents a unit of ownership
of the company in the hands of shareholder.
•The equity papers that represent ownership of company
are referred to as shares.

5. COMMON/ORDINARY SHARES
 Common stock holders have partial ownership
 They enjoy voting rights in the company
 They receive dividend income from the net income of the
company.
 In the event of bankruptcy, common stock shareholders
are entitled to assets left over after creditors,
bondholders and preferred shareholders have been paid
in full.

6. PREFERED SHARES
 The holders have ownership but no voting rights in
management decisions
 They have preference over the ordinary share holders in
recovery of their money in the event of winding up of
company
 This kind of equity is also called hybrid equity because it
contains the features of both stock & bond.
 The preferred stock holders obtains fixed regular
dividend just like the coupon interest receipt of bond
holder.

7. CUMULATIVE PREFERENCE SHARES
 Shareholders have the right to accumulate dividend
payments that were skipped in earlier years.
 They are the first to receive payments once the company
resumes dividend payout.
NON CUMULATIVE PREFERENCE
SHARES
 Shareholders do not accumulate skipped dividend
payments

8. CONVERTIBLE
 Shareholders receive more than the normal dividend
payments if the company makes more than expected
profit.
PARTICIPATING
 Shareholders can convert the preferred stock into a
specified number of shares of common stock

9. Rationale For Division Of
Shares
 Provide different dividend rights for different
shareholders
 Provide voting rights to one class only, or restricted
voting rights to one class, or weighted voting rights to
one class.
 Keep certain rights within one group of people; for
example, employees or one family.
 To increase investment limit of different economic
groups