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Finance & Accounting
Pages 5 (1255 words)
Financial Market Securities [Author Name] [Titles] [Institutional Affiliation] Introduction When a company is established and incorporated, as a public company, the shares are offered to the applications for some money. This amount of money accumulated through the sale of shares forms the capital of the company.
As compared to the employment, the self employed or an entrepreneur in general, have to invest some amount, which is said capital, and it is the fate of the self employed that it may succeed or fail, whereas in the employment there is no risk for the investment, as there is no investment required, all the employee has just to do is to fulfill the job requirement and to get a an earning at fixed rate. The amount to be invested in business has risk, as above mentioned, but the business has too much attraction, because it has good returns, and if comparable by the employment, the investor may receive many multiples of the salary in a single period. A return on money received from the business, that is the profit in general determines the business efficiency. But the question is that, is it necessary to invest money into a company and purchasing the shares? Can’t it be invested in the bank to get the interest income on that? This question has been evaluated in the context of the given topic, and will help in determining the criticalness of various securities in the financial markets. Ordinary shares Ordinary shares are the main source of capital for any public company, the other sources of capital is the debt etc. Ordinary shares provide the money that the shareholders pay to the company and in return receive the dividend, and the rate of dividend depends on the performance of the company. ...
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