Question

Which factors can negatively impact a organization shareholder ? Which of the factors are more significant. Give real life examples’

Answer 1

The factors that can negatively impact a organization shareholders :

1. The controlling interest and voting rights in the company provides more responsibility on shareholders.

2. Under emergency all the effect is on the shareholders stake.

3. Weak fiscal of the economy will affect the revenues of the company and have direct impact on company’s shareholders.

4. Low in interest rates in the economy will have more involvement of the fixed interest capital in the capital structure of the company.

5. Weak cash flow will create the debt clearance pressure on company and take away return to shareholders.

The factors which are most significant :

a) Controlling interest and voting rights of shareholders provides all responsibilities. Many company goes off due to bad decisions of shareholders.

b) Involvement of the low interest rates capital in the capital structure.