Chapter 8 The Stock arker
Chapter 8 The Stock Market
Information Evolution of the stock market o Orgn 17th century London Coffee houses Purpose To form joint-stock companies to undertake risky trading ventures o Stock Exchanges and Future Markets o Board to Boardless Stock Exchange o 24-hour world stock market
Information: Evolution of the Stock Market • Origin – 17th century – London – Coffee houses – Purpose • To form joint-stock companies to undertake risky trading ventures. • Stock Exchanges and Future Markets • Board to Boardless Stock Exchange • 24-hour world stock market
8.1 ELEMENTS OF THE STOCK MARKET o Securrty a piece of paper in which an organization, either business or government, acknowledge a financial obligation o Bond securities issued to the lenders with large numbers sums of money by some organization, such as the government o Security Market where the holders of securities can buy and sell
8.1 ELEMENTS OF THE STOCK MARKET • Security – a piece of paper in which an organization, either business or government, acknowledge a financial obligation. • Bond – securities issued to the lenders with large numbers sums of money by some organization, such as the government. • Security Market – where the holders of securities can buy and sell
Stock's Category Definition the shares in proportion to contribution to the company with vote o Ordinary shares where the shareholders bear the ultimate risk of loss should the company fail, they have no preferential right to the return of their fund Preference shares the shareholders have fixed payner(not fluctuating with the good or bad performance of the company), and have a over th ordinary shareholders. when liquida, the shareholders have preference with regard to repayment of capital. without votes, the shareholders cannot take part in the operation of the company ° Comparison preference shares is less risky than ordinary shares, with limited participation in the profit and decision making
Stock’s Category • Definition – the shares in proportion to contribution to the company with vote. • Ordinary shares – where the shareholders bear the ultimate risk of loss should the company fail, they have no preferential right to the return of their funds. • Preference shares – the shareholders have fixed payment (not fluctuating with the good or bad performance of the company), and have a preference over the ordinary shareholders. – when liquidation, the shareholders have preference with regard to repayment of capital. – without votes, the shareholders cannot take part in the operation of the company • Comparison – preference shares is less risky than ordinary shares, with limited participation in the profit and decision making
Stock's value o Par yalue the amount price recorded on the shares o Market value Issue price o what shareholders pay when the shares are first offered to investors Exchange price . ABHNS Blue chip .Red chip
Stock’s Value • Par value – the amount price recorded on the shares. • Market value – Issue price • what shareholders pay when the shares are first offered to investors. – Exchange price • A.B.H.N.S. • Blue chip • Red chip