shares_1409

This text is an extract from a book and describes or lets the reader know what shares are. This extract talks about the following: in its introduction it makes a brief description of the definition of shares; later on it talks about the assets and what they are; after this, it talks about what a nominal share value is and later on about what the dividend is and its cover; finally it talks about what a yield is.
The author starts of with an introduction explaining what shares are. And from what he says we can know that shares give the investors of the company a share in its dividend, a stake in the company’s assets and property, and a vote proportional to the size of the holding.
Assets in a company are its cash-in-hand, the company’s property and the company’s raw materials in stock resting from that its liabilities.
Shares have a nominal value which represents the asset value of the company. Therefore the total nominal sum of the different shares issued by the company is the issued share capital of the company. These shares are also referred to as the company’s equity or stocks. There are different types of shares, one kind of shares are the shares with no vote; which have the same characteristics as the rest but the difference is that the holder of the share has no vote in the company. But these shares are not as important and trade at a lower price than the voting stock.
The proportion of the company’s profits that are paid to its owners is the dividend of the company. So, part of the company’s benefits goes to dividends but the rest go to investment in the internal growth of the company. The price yield and the price to earnings ratio are a part of the dividend and its cover of the company. The price yield is measured as a percentage. Later on, the company’s earnings are the profits the company has. When the earnings are divided by the number of shares a company has the result is the ‘earnings per share’. Now, the ratio of this measures the number of years of earnings per share at the current price of the share that are needed to pay the share.
Finally, the last important unit of measurement a company has is the yield. The yield is a net percentage of the current share price and it can vary depending on the country you are in. Yields in each country are usually lower than the interests; which can be more safely obtained.

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