Shares_5454

The text from the book "Investing in stocks and shares" written by Dr. John White provides information related with shares. This information is used in order to measure the performance of a company.
Initially it specifies that shares, also called equities or stocks, give investors a share in the company's dividend and the right to vote in the AGM(Anual General Meeting).

Then, it explains how to calculate the company assets. They are calculated by deducting liabilities of the company from the available cash, property, raw materials and the work to be realize.

Thirdly, the text analyze the nominal shares value. Most of the shares have a nominal value that represent the asset value of the company and they can be sold at a different price from nominal value. There are also other types of shares, defined with the suffix A, that may be more profitable but they do not give the shareholder the chance to vote, giving more power of decision to the founders of the company.

In addition, it talks about dividends of the company. It is the part of profit that is distributed among shareholders. The other part of profit is used to achieve the internal growth of the company, or as reserves. The number of times that a company pays the net dividend is called cover.

Later on, it explains the price to earnings ratio. It indicates how many years of earning per share are needed to pay for the current share at the current price of the share. As the company expects shares to rise, each year this ratio should be reduced.

Finally, the yield, that reflects a net percentage of the current share price. It is different in each country, and it usually gives a lower interest than local bonds due to the safety of this investment.

Mark = 6

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