In financial markets Finance is the science of funds management. The general areas of finance are business finance, personal finance, and public finance. Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money, and risk and how they are interrelated. It also deals with how money is spent and budgeted, a share is a unit of account A unit of account is a standard monetary unit of measurement of the market value/cost of goods, services, or assets. It is one of three well-known functions of money. It lends meaning to profits, losses, liability, or assets for various financial instruments including stocks The stock or capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. Stock is distinct from the property and the assets of a business which may fluctuate in (ordinary or preferential), and investments in limited partnerships A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner, and REITs A Real Estate Investment Trust or REIT is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. In return, REITs are required to distribute 90% of their income, which may be taxable, into the hands of the investors. The REIT structure was designed to provide a similar structure for. The common feature of all these is equity participation (limited in the case of preference shares).
The term stocks in the plural is often used as a synonym for shares.[1] Traditionalist demands that the plural stocks be used only when referring to stock of more than one company are rarely heard nowadays.
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Shareholders and dividends
The income received from shares is called a dividend Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be paid to the shareholders as a dividend. Many corporations retain a, and a person owning shares is called a shareholder A mutual shareholder or stockholder is an individual or company that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company and are the members of the company by signing the memorandum of association . Thus, the typical goal of such companies is to enhance shareholder value. This is usually in a large and medium sized business but not necessary in a small business.
Valuation
Shares are valued according to various principles in different markets A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things. Competition is essential in markets, and separates market from trade, but a basic premise is that a share is worth the price at which a transaction would be likely to occur were the shares to be sold. The liquidity In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value. Money, or cash on hand, is the most liquid asset. An act of exchange of a less liquid asset with a more liquid asset is called liquidation. Liquidity also refers both to a of markets is a major consideration as to whether a share is able to be sold at any given time. An actual sale transaction of shares between buyer and seller is usually considered to provide the best prima-facie market indicator as to the 'true value' of shares at that particular moment.
Tax treatment
Tax treatment of dividends varies between territories. For instance, in India, dividends are tax free in the hands of the shareholder, but the company paying the dividend has to pay dividend distribution tax at 12.5%. There is also the concept of a deemed dividend, which is not tax free. Further, Indian tax laws include provisions to stop dividend stripping Dividend stripping is the purchase of shares just before a dividend is paid, and the sale of those shares after that payment, ie. when they go ex-dividend.
Share certificates
A share entitling to 1/8 of the Stora Kopparberg The Great Copper Mountain was a mine in Falun, Sweden, that operated for a millennium from the 10th century to 1992. It produced as much as two thirds of Europe's copper needs and helped fund many of Sweden's wars in the 17th century. Technological developments at the mine had a profound influence on mining globally for two centuries. Since 2001 copper mine in Sweden dates back from 1288. The first share company in the worldInvestors were given share certificates In corporate law, a stock certificate is a legal document that certifies ownership of a specific number of stock shares (or fractions thereof) in a corporation. In large corporations, buying shares does not always lead to a stock certificate (in a case of a small number of shares purchased by a private individual, for instance) as evidence of their ownership of shares but certificates are not always issued nowadays. Instead, the ownership may be recorded electronically by a system such as CREST.
See also
References
cnnmoney.com CNNMoney.com is the world's largest business website. The site is the online home of Fortune and Money, and serves as CNN.com's exclusive business site. The site, edited by Chris Peacock, together with the three titles, is part of the Fortune|Money Group, and attracts more than 10.8 million unique visitors per month, according to Nielsen/ [1]
External links
Categories: Equity securities | Stock market Categories: Financial markets | Investment | Commerce | Equity securities
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