This extract shows the reader different information about shares in a company.First of all, shares give the investor a share in its dividends,a stake in the company's assets and a property, and a vote,this is always proportional to the size of the investor's holdings.They are also known as its equity or stocks.Normally most of the shares have a nominal value, that add up to the issued share capital of the company.The article describes another type of shares that are dessignated by the suffix 'A', this are non-voting shares that enjoy most of the benefits of other shares.However, they are unpopular and are going out of fashion.

Moreover the dividend of a company is the proportion of its profits paid to its owners. The part of the profits that is not used for dividends is retained to fund internal growth or stored for future years.The company's profits are known as its earnings. When the earnings are divided by the number of shares in existence, we get the 'earnings per share' . In order to find out how many years of earnings per share at the current share price would be needed to pay for the share,you need to calculate the price to earnings ratio.

The article ends up with a brief explanation of a yield,an important measure of the company's performance,that is typically expressed as a net percentage of the current share price. The average yield is different between countries and is usually lower than the country's interest.This occurs because when taking a risk you expect a higher return than the one you would receive from a "safe investment".

Mark = 7

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License