Shares2706

The article found on the page http://www.howtobooks.co.uk/family/stock-shares/ explains what are shares and the importance they have in the financial world. We can also read and inform ourselves about many other concepts that are in relation with shares and its influences.
First of all I think we should underline the fact that this article could help to understand many families how a company is divided, its functions and how to invest on them. The article starts giving meaning to some concepts:
- Share: Part of the ownership of a company. A person who buys a portion of a company's capital becomes a shareholder in that company's assets and as such receives a share of the company's profits in the form of an annual dividend. It also gives a vote at the company’s Annual General Meeting according to the size of the investor’s holding.
- Assets: we can explain it like anything of value, anything the company owns.
- Nominal share value: its the price that the shares has, including the value of company´s assets and its capacity to make money
- The dividend and its cover: What is paid out of a company's profits to its shareholders, although sometimes the enterprises don’t distribute all the benefits: only a part of them, the part that it´s not distributed “cover” the distributed dividends.
- yield: percentage of pay-back a share offers, which is usually lower than the interest rate because the profits may be higher
- P/E Ratio: when the company’s profits are divided by the number of shares, we get the earnings per share. The P/E (price to earnings) ratio measures the number of years of earnings per share at the current share price that would be needed to pay for the share. After those years, the dividend will be pure profit

I´ve found this article really interesting because, although I do recognize I needed some help with some concepts and vocabulary, it helped me to understand some facts about how a company works.

Mark = 6

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