Shares2240

In the finance world we find some different words:
The assets comprise its cash-in-hand, property and the company's, less its liabilities or debts.
A share gives the investor a financial involvement in the company's assets and property and a vote, always proportional to the size of the investor's holding. Whereas the nominal share value represents the worth of the assets and their ability to make money, so a 25p nominal share might once have been sold for one pound, reflecting the earnings potential of the company. The amount obtained is the capital of the company is also known as it equity or stock.

Besides, there are in existence some non-voting shares for certain companies, the shares usually being designated by the suffix 'A'. These, usually, enjoy most of the benefits but has no vote (at the beginning, it was to enable control of the company to be kept in the hands of the founding family). However, these are unpopular with major investors.

The dividend is that proportion of its profits paid to the shareholders. It may also serve as a store, when the profit is falling, with which to maintain dividends in lean years. When a company could have paid its net dividend a number of years, is called the cover of the dividend.

When the profits (or earnings) are divided by the number of shares in existence, we get the 'earnings per share' (eps) so The P/E ratio measures how many years of earnings per share at the current share price would be needed to pay for the share.

Although not all of the earnings are paid as dividend. However, it is hoped that the earnings and dividends will rise each year, reducing the repayment time of the share price and thereafter all dividends will be pure profit.

At last, the yield is typically expressed as a net percentage of the current share price; in each country are usually lower than the interest which could be more safely obtained by investment in local bonds, or in the local equivalent of a building society.

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