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you mentioned in your comments that there was less risk related to equity capital because of...

you mentioned in your comments that there was less risk related to equity capital because of not being required to pay these funds back. Question...Do investors have any expectation to receive payments based upon the investment made into a company?

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Risk of investment in equity is relatively higher than investment in other capital market securities like bond or preferred stock. this is because payments are not certain in equity investment as payment in certain in case of bond or preferred stock as interest or dividend. this is because required rate of return on equity is relatively higher than required rate of return on bond or preferred stock.

Equity investor have expectation to receive periodic dividend payments based upon the investment made into a company's stock. Dividend provides the investor a periodic source of income. also, they want dividend to make investment according to their own choice. in finance Cash is considered as king and they wants cash payment in term of dividend.

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