Shares_7021

The text on the following web page http://www.howtobooks.co.uk/family/stock-shares/ deals with various financial terms.

Firstly, the shares of a company are also known as stocks. The issued share capital is the total nominal
value of the shares of the company which have been issued to shareholders.

The shareholders are entitled to a stake in the assets, which are everything of value that is owned
by a company. Shares usually have equal voting rights, but some companies have shares that have fewer
rights, commonly "no-voting shares". Nevertheless, stockholders are entitled to the same proportion of
its profits. They are called dividends.
Part of its profits are usually set aside as provision for financing internal growth of the company or
expected losses.

The P/E ratio shows how many years of earnings per share at the market price would be need to pay
for the share. As mentioned before, a fraction of its profits is hold as reserves; this is why it is required
more time to pay the share price of the dividends back.
But normally, it is also expected that the dividends and earning will increase, diminishing the payment.

Last but not least, another important concept is its yield. It measures the current stock price after income tax.
Despite that fact that, in general, countries have different yields, what they have in common it is that other
financial activities as investment in local bonds generate higher benefits.

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