Dividends and capital gains given to the new shareholders represent returns to the shareholders.
What is shareholders?
The term shareholder refers to a person to purchase the share of company stock. A shareholder represent the person, company, or institute. A company shareholder right to vote. A shareholder right to purchase company share and sale to another person, institute, or company. A shareholder is gaining profit and losses.
The payment of return to investment that is not considered a taxable and non taxes on income is called return on capital. The capital is fluctuated and dynamic to sometimes losses and gain of capital. They purchase capital and share it to sell. The only shareholder is liable to share dividend. The board of directors is share profit to shareholder.
Hence, the significance of the shareholders is aforementioned.
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