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2, Do all of the current investors in a company (e.g., Target) earn the same return...

2, Do all of the current investors in a company (e.g., Target) earn the same return on the capital from their investments? Give reasons for your answers.
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Answer #1

No, all the investors shall not earn the same return on their capital. The return on capital shall be based on the amount of capital contribution that has been made by each shareholder. Higher the number of shares, higher shall be the dividend received and vice versa. The dividend per shall shall be the same based on the profits of the company for the current year after setting apart a part as retained earnings. Thus the number of shares held shall determine the return. Similarly the type of capital held shall also determine the returns, such as debt based capital, preference shares or equity shares, each shall have a different payout by the company.

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