p Outline THREE advantages of ordinary shares. - Study room Q&A
Welcome to Study Room, where you can ask questions and receive answers from other members of the community.

Outline THREE advantages of ordinary shares.

Open 1 Answers 1151 Views Grade 12

1 Answer


Advantages of ordinary shares 

  • Holding a higher number of shares may result in higher proportional dividends.
  • Shares of listed companies can be freely transferred/traded on the JSE.
  • Shareholders' liability for company debts is limited to the amount invested in shares/Shareholders have limited liability for the debts of the company.
  • Shareholders have voting rights at the annual general meeting (AGM).
  • Rate of return on investment (ROI) is linked to the performance of the company.
  • Ordinary shares are usually cheaper than preference shares on the open market.
  • Ordinary shareholders can track the value of their investment through published information/different media.

answered by Master (644k points)