Implied Dividend Growth Rate
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Forex quotations can be quite complex for the average person. It takes some training and knowledge to understand that these quotations can be provided in more than one way! Also, it takes a little getting used to before a person can quickly comprehend these quotes and take quick decisions based on the same. In this […]
Hard Brexit vs. Soft Brexit
The British government has held a referendum wherein the majority of British citizens voted to leave the European Union. This phenomenon has been popularly named “Brexit” by the media. The fact that Britain will leave the European Union is certain. However, there is still a lot of uncertainty regarding the terms on which Britain will […]
An organization in order to raise money divides its entire capital into small units of equal value. Each unit is called a share.
A share is nothing but an indivisible unit of a company’s capital to be sold among individuals to increase profit of the organization.
An individual owning one or more than one share of an organization is called a shareholder. In simpler words, an individual purchasing one or more than one share from any private or public organization is called a shareholder.
Why do people invest in shares ?
An organization pays the shareholders for investing in their company’s shares. The income earned by an individual by investing in an organization’s share (private or public) is called as dividend.
What is Retained Earnings ?
The profit earned by an organization is put into use in the following two ways:
What is a Share Certificate ?
When an individual purchases shares from any organization, he/she is issued a certificate as a proof of his investment. Such a certificate issued by an organization to the shareholders is called a share certificate.
Equity shares also called as ordinary shares are the shares where the payment of dividend is directly proportional to the profits earned by the organization. Higher the profits earned, higher the dividend, lower the profits, and lower the dividend. In an equity share, dividends are paid at a fluctuating/floating rate.
Shares which enjoy preference over payment of dividends are called preference shares. Shareholders enjoy fixed rate of dividends in case of preference shares.
Shares held by the management or founders of the organization are called as founder shares.
Bonus shares are often issued to the shareholders when the organization earns surplus profits. The company officials may decide to pay the extra profits to the shareholders either as cash (dividend) or issue a bonus share to them.
Bonus shares are often issued by organizations to the shareholders free of charge as a gift in proportion to their existing shares with the organization.
How to buy shares ?
A stock market is a platform for trading of company’s shares at an agreed rate.
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