SHARES_2211

A share it is a way of financing of the company. It gives the investor a share in its dividend. When you buy a share you form part of the company´s assets and a property and a vote.

The assets are composed by cash-in-hand, property and work-in-hand, less its liabilities in the form borrowings or payments to creditors.

The nominal share value represented the asset value of the company.

There are some shares that do not have the right to vote, they enjoy of the same benefits of other shares except they cannot form part of the decisions of the company. This type of shares is unpopular with major investors.

The dividend of the company is that proportion of its profits paid to its owners, the shareholders. Normally a company will pay only a part of its profits as a dividend. The remainder is retained to fund internal growth 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 “earnings per share”.

Not all of the earnings are paid as dividend. Of course the stock does not have to be held forever, and can be sold at the current going rate, the “market price”.

Another important measure of a company´s performance is its yield. The yield is expressed as a net percentage of the current share price.

The yields in each country are usually lower than the interest could be more safely obtained by investment in local bonds or in the local equivalent of a building society.

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