Shares 0808

The text of the page http://www.howtobooks.co.uk/family/stock-shares/ is extracted from the book “investing in stock and shares” written by Dr. White. It gives us information about some terms of the shares. The share gives to the investor the right to vote in AMG and they can receive part of the dividends produced by the company.

Firstly, this text gives us one definition of assets. The assets are divided into two parts: the property (land, buildings…), cash in hand, raw material and the work to be realized; minus its liabilities.

This extract of the book analyzes the nominal share value, this term represents the assets value of the company and the sum of all shares the issued share capital of the company. Most shares have a nominal value and right to vote, but some shareholders have no right to vote, this shares were created to give power to the founders of the company; however, we have to say that these shares are not popular for investors and consequently this shares are trade at a very low price.

Also, the text analyzes the concept of dividends. The dividends are the profits paid to the investors. A part of dividends are distributed among its shareholders and the other part is used to finance the company. The cover is the times that the company could have paid its net dividend.

On the other hand, the P/E Ratio is calculated dividing earnings by the number of shares in existence. The earnings are paid as dividend, but also, the earning are needs to repay the share price out of dividend. The Financial Time said that the Great Universal P/E = 13.7

Finally, but not less, this extract of the book give us the definition of yield. The yield is a net percentage of the share price. Yields are lower in some countries. For example, the yield is lower in each country that the interest in local bonds, that is because the bonds are safer. The lower return from shares reflects growth dividend payouts.

(WORD: 336)

Mark = 6

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