The first thing we see as we enter is a website dedicated to books related with shares,dividends,trading,etc. It's a very particular site because it gives us information about those themes in a very particular way which is throughout books. Here, people can read extracts from them in order to make it easier and less risked to buy one and to decide if it gives the right information they were looking for.
In our case,we can see that the extract we have comes from a book called "Investing in stocks and shares", written by the doctor John White. This extract is divided in seven small parts to show us as much as possible from the book.
The first part talks about shares. If we have a share of a company it means we have a sort of rights like receiving a dividend once or twice a year or it also means having a small part of the company that allow us even to vote in the company's anual general meeting.
The second paragraph is about assets and what they comprise, which are cash-in-hand, properties, buildingsā€¦
The next part is called "nominal share value" and explains us that most shares has a value which is nominal, usually varies and summed to all the other company's shares reflects whats called the company's capital share.They are sold and bought constantly in the market. But contary to what we said in the definiton, there are some shares that don't allow us to vote,i.e the shareholder doesn't have the power to opinate in the company's strategy but can enjoy the rest of the share's benefits.These kind of shares are used in family businesses in order to controle the company by only some special members.
Arrived now to "the dividend and its cover" we see they are the part or proportion the holder receives from its profits.Thse dividends are paid only if the company makes profits which is a good tip if these start to fall they serve as a security "net". The text also gives us the example about the cover:if the business makes a profit of a million pound, and it's only paid a quarter of that million in dividends, we say that the dividend is covered four times.
Last but not least, the paragraph talking about the P/E (price to earnings) says its ratio mesures for how long(in years usually) of "eps"(earnings per share) are needed to pay the share without changing the share price. The author also advices not all the earnings are paid as dividends and contrary to this businessmen hope that the earnings and consequently dividends will rise each year reducing the time between the share is sold and we get the money back.
Finally, the last paragraph is about the yield, which is expressed in a net percentage of the actual share price.As the author says, yields are safer invested in local bonds reason why they are lower than the interests.People who accepts chosing the risk will probably get more money back than people who try a "safe" investment.At the end, the return from shares is what reflects the company's power in order to pay dividends and to grow in the market, which is not usually done with small and "safe" investments.

Mark = 7

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