shares_7989

Summary: What are shares?

The text “What are shares?” found in the website www.howtobooks.com, explains what shares are inside the world of business. Shares are defined as stakes in the company’s assets, property and a vote, giving investors a proportion in the dividend of the company. All these are directly proportional to the size of the holding the investor has in the company. The article continues by relating shares to assets, and how assets are constituted by the difference between cash, property, stock in raw materials and hand-made, and between liabilities Assets are followed in the text by the nominal value of shares, which represent the asset value of the company, while the nominal sum of the issued shares equals the issued shared capital of the comjajajpany. Some companies have “Suffix-A shares”, unusual shares that have the same benefits as common shares however do not include a vote in the company’s business. Furthermore, the text proceeds saying how the owners of a company will receive one or twice a year the dividend (a proportion of the profits). The article remarks that dividends only include part of the profits, therefore the company will keep part of the profits in order to grow internally.
The second half of the text includes an example of the company Great Universal Stores. A company’s profits are known as its earnings, and the division between earnings and number of shares gives us the “earnings per share”. The price to earnings ratio measures how many years per share (at the current share price) would pay for the share. Finally, the yield is a net percentage of the price of the share at a current time, and it is an important measure of the company’s wealth. The average yields vary in the different countries. A high risk will give a higher benefit, while a low risk will give us a lower return.

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