The website gives the reader some important economic definitions related to shares:

1. Shares: they give the investor a share in the company’s dividend, a stake in the company’s assets and property and the right to vote at its AGM. However, there also exist non-voting shares in order to keep the company’s control among the original founders. But nowadays, they are becoming less and less popular.
2. Assets: it includes the company’s cash-in-hand, its property, the stock of raw materials and work-in-hand minus the company’s liabilities.
3. Nominal Share Value: shares have a nominal value (normally 25p). It initially symbolized the asset value of the company and summed up they form the issued share capital of the company.
4. Dividend: is the proportion of the company’s profits paid to its shareholders. The rest of the profits is used for internal growth or as a store for future dividends.
5. Cover: it indicates how many times a company could have paid its dividend considering its profit.
6. P/E Ratio: is the number of years of earnings per share needed to pay for the share at the current share price.
7. The Yield: is a net percentage of the current share price. It is generally lower than the interest that could be less risky obtained by investing in local bonds due to the growth potential of dividend payouts uncommon in safer investments.

Mark = 5

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License