Thus an investment with a highly uncertain level of return is classified as risky. Equity share capital is the ultimate risk-bearing capital of a company. Strictly, equities include all the different types of shares that might exist, that is, ordinary shares, preference shares, deferred shares, etc. However, the most important categories are ordinary shares and preference shares. Quoted shares are those with prices that are quoted on any stock exchange.
Unquoted shares have different characteristics.
The company's profits will hopefully rise with inflation, real economic growth and advances made by the company. This implies that dividends too must rise, but there is no guarantee. However, during periods of recession dividends may fall. Companies do not guarantee the future level of dividends, or indeed, whether any dividends will be paid at all. As most shares are of indefinite term, the dividend stream is indefinite.