Shares0004

The content of the website http://howtobooks.co.uk/family/stock-shares/ is based principally in the term shares. It describes concepts related to shares, which are explained bellow.

Shares are parts or fractions of a company which attribute some rights to their shareholder such as a part of the dividend generated by the company, a stake in the company’s assets, or a vote.
But there are a sort of shares which don’t incorporate this last right, they are called “non-voting shares” and are traded at a lower price.
Most shares have a normal value which originally represented the asset value of the company.

The company’s profits are known as its earnings. When the earnings are divided by the number of shares in existence, we get the “earning per share”.

Shareholders receive a dividend or the non-retained part of the generated profits. Based on this concept, we can establish the cover of the dividend which is the number of times that a company could have paid its net dividend.

And finally, there are two ways to measure the company’s performance, the first one is the P/E ratio, which is the number of years of earnings per share needed to pay it, and the second one is the yield, which is typically expressed as a net percentage of the current share price.

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