Shares_1898

This text has the definitions about some economic terms, in particular talk about assets, nominal share value, dividends, price yield, P/E ratio and the yield.

When we talk about the shares, the principal thing about this, is the dividend obtained by the investor. Having shares also means , stake in the company´s assets and be a company partner with vote in the annual general meeting (AGM).

The assets are composed by cash-in-hand, property and the stock of raw materials or work in hand.

The nominal share value represents the assets value of the company. When the company sell his shares at the market also represent the profitability. The amount of nominal share value is called issued capital of the company. There are some shares which have non-voting, in some companies. These shares make more benefits. But now it has became to be unpopular, and it is changing to voting status.

The company pays to the owners a percentage of the profits, which called dividend. But the company don’t pay all the profits, the rest of them are aimed to self-finance the company. In some cases are kept until the profits is falling, to ensure the owners earnings. The cover of the dividend is the times that the company could pay dividends.

The P/E Ratio is the price to earning, that measures the years of earnings per share (profits divided by the number of shares) necessaries to pay for the share, in the current share price. Each year the shareholders and earning grow. It allows reducing the repayment time of share price, and, then, it makes all profits are dividends.

The yield is an important measure, in the way that shows a percentage of the current share price. The long term average yield change depending the countries. The share’s risk isn’t usually lower than other investments. This is the reason about that the shares usually achieve more yield.

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