Shares_1010

The text from the Family Books of the how to guides web page provides the reader with information and practical advice for investing in stocks and shares by providing some concepts concerning shares . A share in a company gives the investor a share in its dividend and also allows its holder to vote at the company’s annual general meeting. Moreover, when we talk about assets of a company we refer to properties, cash–in-hand and the company’s stock of raw materials and work-in-hand, less its liabilities to creditors. Usually shares have a nominal value which represents the original asset value of the company. They also exist the non-voting shares designated by the suffix “A” that deny their holders the right to vote. The original idea of these shares was to enable control of the company to be retained in the hands of the founding family. However, these shares are unpopular with major investors, trade at a lower price than the voting stock and are going out of fashion.
In addition to this, the dividend of a company is the proportion of the profits that is paid to the shareholders. There is another proportion that is retained by the company in order to impel its internal growth or to serve as a store of “fat”. The number of times that a company could have paid its net dividend is the cover of the dividend.
Another important concept is the P/E Ratio that measures how many years of earnings per share at the current share price would be needed to pay for a share. If earnings and dividends rise each year , the repayment time will be reduced.
Finally, the last concept is the Yield of a company that is the net percentage of the current share price .The yields in each country are lower than the interest obtained by investment in local bonds due to the fact that risk entitles the risk taker to a higher return than from a 'safe' investment.

Mark = 5

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License