The excerpt from the text “Investing in Stocks and Shares” explains briefly what a share is and which principal characteristics are there.
A share is defined on the text as the right that the company gives the investor to take part, vote or to participate on the company’s dividends.

Most shares have a nominal value that represents the asset value of the company. The total of the nominal sum of all the issued shares is the issued share capital of the company. The shares are also call stocks or equities.
In certain companies there are some non-voting shares, these shares have the same function as the other shares but the only inconvenient is that the owners of this kind of stocks do not have the right to vote in order to take part in company’s strategy.

The dividends take an important role in the function of the equities. Stockholders will get a part of the profits of the company depending on the volume of their total shares. Not all profits are paid as dividend.

Another important concept is the P/E ratio, which measures how many years of earnings per share at the current share price would be needed to pay for the share.

Finally, the concept of yield is introduced. It is represented as a net percentage of the current share price. Yields are often lower than the interest produce by investment in local bonds. Shares are more risky than bonds but have a higher return.

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