Question

"Which of the following are advantages to being a shareholder: 1.The expected returns for equities are higher than debt securities. 2.Equities have prices listed on major exchanges and are marketable. 3.Equities typically earn their expected return. 4. Equities that do not pay a dividend are tax efficient."

Answer 1

The answer is 1, 2 and 4

Step-by-step explanation:

Because equity holders usually have long-term interest in the company and they are concerned about increasing the value of the company and that they are at the greatest risk when the company goes bankruptcy, the expected returns for equities for shareholders are higher than debt securities for bondholders or banks.

Equity securities, both current and non-current, are listed at the lower value of cost or market on stock exchange.

Some companies dont pay dividends and some do buy but the equity that do not pay a dividend are tax efficient.