Every companies whether it is a small scale/ medium scale/ large scale their directors need money to run their industry. They will gain money from
- their own savings
- by their partners
- by getting loan in banks
- And issuing stocks/ shares.
Stocks or shares are the bonds between a corporate and a investor (ordinary man) in which the investor gives the money to an organisation in the name of stocks/ shares.
By announcing IPO (initial public offer) a corporate industry issues stocks/ shares to the investors.
By buying the stocks/ shares every investor becoming the partner of the company.
The investor gains
- if the stock price increases
- by dividend announced by the company
The stock price increases if the company performs well and it books good profit.
dividends are announced by a company to its investors in which the company divides its profit surplus in the name of dividend.
by investing in a good company the investor gains.
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