After reading an advertisement in the newspaper about an upcoming public issue of preference shares of a pharmaceutical company, Tushar made up his mind to invest money in that issue. Later on, he discussed his plan with his friend Vikesh who is a stockbroker. Vikesh on the contrary advised him to invest in equity instead. Give any three possible reasons because of which Vikesh wants Tushar to invest in equity and not in preference shares.

Dear Student
Three possible reasons because of which Vikesh wants Tushar to invest in equity and not in preference shares-
1. Equity shareholders have voting rights in company management whereas preference shareholders don't have voting rights.
2. Equity shareholder will get profits in two ways the rise in the value of shares and  yearly dividend.
3. Dividend rates of equity shareholder is depends on the profits earned by the company whereas dividend rate of preference shareholder is fixed. So if in any year company earn more profits than there are chances that equity shareholder will get more profits.

Regards

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