The text of the page becomes from the book “investing in stock and shares” whose author is Dr. White.

This text defines some economic terms such as shares, assets, yields, etc….

Firstly comes the definition of shares, shares are a part of the financial system of a company, allows investors take part in the annual general meeting (AGM) and receive part of the dividend which correspond to them.

Afterwards it is given the definition of assets, it comprise cash in hand, raw material, property, etc…less liabilities. The formula of the asset is: Assets = Liabilities + Stockholders' Equity.

Then the Nominal Share Value which is the asset value of the company, the sum of all shares the issued share capital of the company. In most of the companies shares have nominal value and right to vote but in some companies this right to vote is not given. The original idea of these shares was to enable control of the company to be retained in the hands of the founding family, these shares are not popular for investors and so on these shares are trade at a very low price.
Consequently defines the concept of dividends and its cover which is the proportion of the profits that correspond to each shareholder, and only will pay if the company makes profits. Also the cover is the number of times that a company could have paid the dividend to the shareholders.

Once the benefit is spread to all shareholders we get the earning per share, the P / E ratio measures how many years of “eps” at the current share price would be needed to pay the share.

The last term defined is yield, the yield is a net percentage of the share price, is lower in each country that the interest in local bonds, that is because the bonds are safer.

To conclude, White explains us how to buy, sell, the market of shares, the broker, the stock market investment and strategy etc….so pretty a lot of advices to let anyone introduce to the world of finance.

Mark = 4

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