Shares1010

STOCKS AND SHARES:
The page is a short summary of a book written to make stocks and shares and other investment terms more accessible to families. It explains:
Shares: A share gives its owner the right to earn a percentage of the dividends a company gives to its investors, and allows him to vote at the annual general meeting according to that same proportion, the more stocks the more votes.
Assets: The assets of a company, is everything a company owns that may be converted into cash. Assets are what the company uses to confront and pay its debts, i.e. properties, etc
Nominal share value: it represents the original value of the stock when it first went out to sale. A stock may cost more in the future, reflecting a potential growth in the company value as a result of its earnings.
There are also non-voting shares, which allow the owner to have the same rights in receiving dividends, but not the voting ones as they do not permit to vote. They were originally intended for the founding families to remain in control.
Dividend and its cover: the dividend is the part of a company’s gains that is spread to its shareholders; it is divided by all stocks equally. The dividend is not all the company profit, because some of it will return to the company in order to for savings for years with no profits. A cover is the times a company could have given out dividend, i.e. if a company profits 100, and gives dividends of 10; the dividend is covered 10 times.
P/E ratio: when the company earnings are divided by the stocks, we get the earnings per share, and then the P/E is the years it takes for the earnings to pay the price of the share.
The Yield: the yield is the performance of a stock, usually under the local interest rate. That is because stock buyers expect a risk that will obtain them larger capital gains than other safer investments with higher interest.

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