Shares1919

This article explains us what the shares are and all the tools that we need to understand the concept.
A company is divided in shares, that receive a dividend or two each year, and give the owner the right to vote, the more stocks he has the more his vote counts

The text continues with the assets, which means the possessions the company owns, including cash, properties, raw materials stock work-in-hand, everything once deducted liabilities (payments, creditors or borrowings). Like the text says “shares represent the assets value of the company” and most shares have a nominal value that usually change when shares are sold. They can rise or they can fall, but it´s clear that they represent the value of the company and their ability to make money. The sum of all the shares conform the capital of the company.Also there are non-voting shares that are unpopular because the holder has no vote in the company strategy, which is why they are being eliminated.

The dividend of a company is the amount of profit the company decides to share with its shareholders dividing the amount by the number of shares equally. The proportion of benefit the company decides to share is the cover, i.e. a company makes 100, gives out to stockholders 25, that means its given out ¼, the cover is 4.

The company’s earnings are divided by the number of shares giving a ratio, called earnings per share, indicating the payback of each share. Having that in mind you can calculate how long it will take for the dividends to pay of, that is P/E price to earnings, which is the number of years.

And finally the yield is the percentage of pay-back a share offers, which is usually lower than the interest rate because the profits may be higher, but there is also an extra risk, than in other safer investments that depend more on interest rates.

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