What are implications of ownership rights by equity claims, Financial Management

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What are the main implications of ownership rights by equity claims?

Ownership rights have two primary implications:

a. First, equity holders can advantage by any raise in the income or asset value of the company. But stock price raise (reduces) onto the financial market, equity holders can acquire high capital gains (losses), while this is very not likely by investing in bonds.

b. Second, equity holders include the right to vote for directors or onto particular issues. The economic proportion and ownership rights is different between preferred stocks and common stocks.


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