shares_1717

.This article belongs to a book titled "Stocks and shares", which has been written by John White. It talks about several basic concepts of how can people invest in shares and stocks.
.Firstly, the article explain and define that a share gives the investor not only a minimum part of the company, also the capacity of taking part at the annual general meeting (AGM) and the right of receiving dividens (which are declared once or twice a year). It also says that the assets represents cash-in-hand, property, work-in-hand, etc of a company and can reduce liabilities as payments to creditors.
.Talking about the nominal share value, the author says that originally represents the asset value of the company, but firstly are sold at a market value. All the shares issued by the company and it's nominal can be defined as the issued capital of the company. It also exists the non-voting shares, which gives their shareholders most of the benefits of other shares but non the capacity of voting in the company's strategy.
.The dividends are the part of company's profits that goes to shareholders. There is also a part that is retained to finance the internal growth of the company or maintain future dividends when profits disappear. The number of times that a company pay its net dividens is called the "cover" of the dividend.
.The P/E Ratio measures the number of years of earnings at the current share price would be necessary to cover the original price paid by the shareholder. After this time, we can say that all the dividends of this share will be pure profit. There is also the possibility of solding the share with the "market price".
.The yield, which is one of the most important measures of a company's performance, is expressed as a percentage of the normal share price. In each country, the yields are normally lower than the interest of for example investing in local bonds. We can see the example of the UK, with a 3.6 per cent or the 2.8 per cent in the USA.

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