Why ordinary equity share is called risky share? – InterviewSolution

1.	Why ordinary equity share is called risky share?
Answer» The buyers of equity shares take a lot of risk on their heads by buying the shares. They know that the price of shares may go down in the market. They also know that they may or may not get dividends and also that the amount of dividends will never be fixed. In case of liquidation when company pays off all its debts and then if it has some money left only then it will give the capital back to equity share-holders. Owing to several risks that equity share-holders take and still remain stuck to the company as investors they are known as true owners of the company.

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