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Answer» Advantages of ordinary shares: - Share-holders/investors buying these shares are considered the true owners of the company.
- Share-holders can earn good dividends.
- Share-holders have right to attend general meetings and right to vote and elect directors.
- Prices of these shares fluctuate frequently and so one can make good money by trading them in the share market.
- Share-holders may also get bonus shares from the company.
Disadvantages of ordinary shares: - Owners of ordinary shares are under high risk of price fluctuations of share in the market.
- In case of liquidation of the company they are the last to receive their capital invested in the shares.
- They may not get or may get very less dividend.
- Though they have voting rights but small investors may not be able to put their words in company’s management due to domination of directors and big investors. Share-holders may become victims of speculation.
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