Shareholders

• Who is considered a shareholder?

  Anyone with a share in a company
• What types of companies can have shareholders?

  Private limited and public limited companies
• What is one key feature of shareholders at the AGM?

  They can vote at the AGM
• What does limited liability mean for shareholders?

  Maximum loss equals their investment amount
• What do shareholders receive if the company offers dividends?

  Access to a cut of the profits
• What is one reason to become a shareholder?

  To achieve capital gain from share value increase
• Why might someone want to be a majority shareholder?

  To have control over company decisions
• What are ethical reasons for investing in a company?

  Investing based on personal values or beliefs
• How is the share price of a private limited company determined?

  By agreement between buyer and seller
• What primarily influences the share price of a public limited company?

  Supply and demand on the stock exchange
• What happens to share prices if there is an increase in supply?

  Prices of shares will fall
• What occurs when demand for a share increases?

  Price of the share will increase
• How does business performance affect share prices?

  Positive performance increases demand and price
• What effect do rising interest rates have on share prices?

  They may lead to selling shares, lowering prices
• What happens to share prices when interest rates decrease?

  Demand for shares increases, raising prices
• What is quantitative easing (QE)?

  Central banks electronically print cash to buy bonds
• How does QE affect demand for shares?

  Increases demand for shares, raising prices
• What is the relationship between economic performance and share prices?

  Good performance increases demand and prices
• How does a rival's performance impact your company's share price?

  Rival success may lead to a sell-off
• What is the effect of share buybacks on share prices?

  They increase demand and raise prices
• What happens to share prices during a poorly perceived merger?

  May lead to a sell-off and price drop
• What does it mean if share prices fall below purchase price?

  You have lost money on your investment
• What is the significance of long-term trends in share prices?

  They indicate potential for capital gains
• What is the formula for market capitalization?

  Number of shares times current market price
• How does a change in share price affect market capitalization?

  It changes the market capitalization value
• What can cause a change in the number of shares?

  Equity issues and new share issues
• What might happen to share prices after new share issues?

  Share prices may fall due to increased supply
• Who decides the size of dividends?

  Management of the company
• What are dividends?

  Distributions of profits to shareholders
• How are dividends usually paid?

  In cash
• What is the typical frequency of dividend payments?

  Annually, semi-annually, or quarterly
• Where are dividends accounted for in financial statements?

  On the statement of financial position
• What are retained earnings?

  Profits left after dividends are paid
• What do retained earnings form part of?

  Wider retained profits of the business
• What is the declaration date?

  The date management announces a dividend
• What happens on the ex-dividend date?

  Shareholders must own shares to qualify for dividends
• What is the significance of the ex-dividend date?

  It determines eligibility for the next dividend
• How might share prices be influenced on the ex-dividend date?

  Share prices may fall due to dividend ineligibility
• What is opportunity cost in relation to dividends?

  Potential benefits lost by paying dividends
• What is short-termism in the context of dividends?

  Focus on immediate shareholder satisfaction