shares_4815

This text extracted from a book try to explain what are the shares, and for what are they used for. To do this, it defines other economic terms such as assets, the nominal value, the dividend, the P / E ratio and the yield.

The main features of the shares described by the text are that they give the holders the right to a share in the dividend of the company as well as a share of the assets and property of the company and voting rights at the AGM in proportion to their investment.

The assets include cash, real estate, capital and labor or work, less liabilities.

The nominal value of the shares is usually 25p, but often could be more or less. It reflects the total issued share capital of the company.
There are other shares called non-voting shares that do not allow the holder to vote in the company's strategy, that is why are unpopular for major investors.

The dividend is the part of profits that is paid in proportion to the shareholders. The remaining part can have several uses.
And the cover is the number of times that a company could have paid the dividend to the shareholders.
When you split the profits (earnings) between the number of shares of a company you would obtain the "earning per share." The P / E ratios measure how many years of eps at the current share price would be needed to pay the share. Well, not all earnings are paid as dividends so it will be needed more years to pay that price, although this revenue is expected to be increased in the following years, and therefore, the dividends.

The last term analyzed is the yield, important feature of the company's performance. It is usually represented as a percentage. It is important to say that the interest varies depending on the country you are in; interests are generally higher than the yields in each country, because can be more safely obtained.

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