Shares9572

This text is extracted from a book created to families that need some kind of help in financial assets. It contains basic concepts that must be known for the activity of investing in stocks and shares.

To begin with, the author defines the paper of the shares in the company, which are represented by a person who has in property te assets of a company, and on behalf of them he votes in the annual general meeting. Furthermore, he receives a quantity or dividend from these assets, which are defined as a company's cash-in-hand, the property (made up of land, buildingsā€¦) and the company's stock of raw materials and work-in-hand, less its liabilities (borrowings or payments to creditors).

The Nominal Value of a share (that might be known also as equity or stock) reflects the earning protential of the company, and all nominal sumed up results the share capital of the company.

There are also some non-voting shares (that are represented by the suffix A). They normally enjoys great dividends but they cannot take part in the decisions taken by the other shares. This was originally an idea to preserve the supremacy of the founding family. In contrast, this shares are very unpopular among investors, due to the fact that they are traded at a lower price.

The dividends of a company are the proportion of profit divided into the shareholders. Only part of this profit is paid, the rest is invested in the internal fund of the company.

The cover of the dividend is the number of times a company could have paid its net dividend.

The P/E (price to earnings) is a concept that measures how many years of earnings per share would be needed to pay for the share at the current share price.

Finally, Dr. White states that the yield represents the current share price as a net percentage. The yield in each country could be different (lower) than the interest obtained from local bonds, due to the risk taken in contrast of a safe investment.

Mark = 6

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