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The article “What are Shares?” expounds that a share in a company provides the investor a stake, according to the size of the investor’s holding, in its dividend, its assets and its property and a vote in the company’s decisions at its annual general meeting (AGM). The company assets contain the cash-in-hand, property and the stock of raw materials and work-in-hand of the company, except for the liabilities.

Most shares have a nominal value; consequently the total of the nominal sum of all the issued shares is the issued share capital of the company. In certain firms there are two kinds of shares: voting stocks reserved to the founding family; and on the other hand, non-voting shares or ‘class A shares’ that enjoy most of the benefits of other shares, but don’t include voting right. However, these last shares are going out of fashion and turning into voting shares.

The part of the profits paid to its shareholders is called the ‘dividend of the company’ and the ‘cover of the dividend’ is the number of times that a firm could have paid its net dividend. Furthermore, the profits divided by the number of shares in existence determine the ‘earnings per share’, and the price to earnings (P/E) ratio measures how many years of earnings per share at the current share would be needed to pay for the share. Finally, it’s also important the ‘yield’ of a company, normally expressed as a net percentage of the current share price.

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