Shares 14/04

What are shares?
Shares represent ownership of a company. When an individual buys shares in a company, they become owners of the company. Shareholders choose who runs the company and are involved in making key decisions, such as whether a business should be sold.The capacity of taking decisions or not will depend on the number of shares you have.
While shares are associated with the stock market, the majority of small businesses don't go near a stock market in their lifetime, mainly because they have no need to do so.

The assets
An asset, is any item of economic value owned by an individual or a company, that could be converted to cash.

Nominal share value
The nominal value of a share is an arbitrary value given to that unit(share).In a share, it is usually the market value not the nominal or book amount which investors and other stakeholders are interested in.
The market value of a share is always different to the real price of the share, because once the share are introduced in the market, Immediately their value starts to change.
Some economists believe that there is no real benefit in allocating a higher or lower nominal value to a share.All over the world new limited companies are registered with a a book value of 1dollar per share, but it could be even lover.

The dividend and its cover
At the end of a calendar year, a company's board decides whether the business has done well enough to pay shareholders a dividend or not. A dividend is a part of the company's profits that is given to shareholders. In larger companies, it is common that thay pay more than one dividend each year, or to the divide the total dividend by two, so they give dividends every six months instead of 12 months. The dividend is calculated per share, so the more shares you have, the more money you get.
Dividend cover is a measure of the ability of a company to maintain the level of dividend paid out. The higher the cover, the better the ability to maintain dividends if profits drop. This needs to be looked at in the context of how stable a company’s earnings are.

Price Yield
Yield is the return an investor will receive by holding a bond to maturity(to the end of the term).

P/E Ratio
Evaluation ratio of a company is the current share price compared to its per-share earnings.

The Yield
The income return on an investment. This refers to the interest or dividends received and it is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value(the value in the share).

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