A stock market is a place where stocks and bonds are regularly traded. The stock market plays an important role in the economy where the prices of the stock reflect upon the growth of the country’s economy. Companies who choose to list themselves in the stock market are known as public listed companies where their company assets are open for investment to the public. The stock market connects the buyer and seller where companies are in need of funds and investors are looking for a place to invest their money in. Investors who have invested money into the stocks of the public listed company are now shareholders of that company, where investors now own a part of the company. The purpose of investors investing their money into the stock market is for the financial return, also known as profits. If the company or firm makes a profit, shareholders will be rewarded with dividends however, if the company is making losses, shareholders will also be making a loss in their investment. The stock market prices are volatile where prices rise and fall on a daily basis therefore, investors who invests in the stock market should be aware of the risks involved. The importance of stock market The primary importance of the stock market is to increase the country’s economy as well as the global economy. When investors invest their money in stocks, they are contributing to the growth and development of the economy. Most companies choose to get listed in order to be able to issue shares to the public to generate funds for their growth and expansion. Besides that, issuing shares to the public is less risky compared to taking loans from financial institutions where there are higher charges for interest. If the company is developing well with these inv... ... middle of paper ... ... earn their profit. Therefore, if a company is not performing up to the investors’ expectations, it can put a lot of pressure on them. Conclusion In conclusion, the stock market is a conservative approach for companies to seek funds for further expansion and development. The stock market plays an important role in developing the economy as it helps the economy to develop and grow when investors invest their money in to the stock. With investments pouring into the economy, companies are able to make bigger profits to reward their shareholders with dividends. Although there are disadvantages of a public listed company, the advantages outweigh the disadvantages where companies are able to seek for additional funds for future expansion and growth. A public listed company also has a better reputation and credibility where it is able to contribute to the global economy.
If the world, consisting of the consciences of over six billion people, wants the market to grow, then the market will grow. With international interest and knowledge, we can eliminate fraud and stock pooling to raise stock prices. The markets will be more honest, and they will grow at a rate that we need them to, in order to continue with our exceptional economic growth rate.
Through out his tenure at Sunbeam,Al Dunlap’s advocated profit by firing many employees and shutting down many factories.If we look at it in the short term ,this approach seems very attractive as it brings in quick short term gains.In the long term ,however, such a decision would not ensure the sustainability of the company. Profitability and responsibility can and should be combined in an ideal world, however it is clear that they are at least partially contradictory. Shareholder pressure should not force a company to make short-term decisions that might be detrimental to the long-term profitability of the company.
At the end of September and the beginning of October, stock prices began to decrease. The crash was caused by the nervous investors, which sold 16.9 million stocks on the New York Stock Exchange in one day. Many businesses invest most of their money in the stock market to make more money, but when the stock market crashes, so do businesses that have to shut down because they have no money. Most of the nation’s banks also failed because they had to put the depositors money in the stock market to increase, but when it crashed people lost most of their money. Many people started to lose faith in the stock market and “you can’t have a healthy economy without confidence in the market.”
The stock market is a vehicle to invest money. It is where consumers buy and sell fractions of companies, and is referred to as stocks. A proven method to achieve wealth while keeping up with inflation, comprised of publically held companies who offer goods and services that are used by the general public daily. Companies sell stocks to public investors in a free and open market environment on a daily basis, which is an effective strategy to build a sound financial future.
...hese events happen or minimize the negative impact when they happened. This will stabilize the distributable profit.
These targets put pressure on the executives of these large companies, who in turn put pressure on their employees and cause a “trickle down effect” where the motivation for the company is to meet these obscure targets (huge earnings numbers), because then their public company will stack up higher when compared to other companies like their own. One thing that Stephen Richards emphasized in his letter was how Computer Associates International “was among the most aggressive in its pursuit of goals,” therefore exerting immense pressure to excel on the employees, especially the executives. While CA was one of the first computer software companies of its time, in the 1980s and
Being listed on a stock exchange allows for many more investors, both in the country of the listing and abroad, who can supply the company with funding.
A stock is a share of a public corporation that is traded in the open market. It is how a corporation raises its’ capital to expand their business and ability to produce goods or services. There are two types of stock: common and preferred stocks. The difference is how an investor receives a dividend. Both stocks give a person a piece of ownership of a corporation with the hope that there is a return on their investment.
If they company thinks that the earning will fall, stocks will decrease; deterring from investors losing money these types of
towards investment, the idea that they are indebted to their investors. We are not discounting the fact...
Capital markets are markets "where people, companies, and governments with more funds than they need (because they save some of their income) transfer those funds to people, companies, or governments who have a shortage of funds (because they spend more than their income)" (Woepking, ¶3). The two major capital markets are stock and bond markets. Capital markets promote economic efficiency by moving funds from those who do not have an immediate need for it to those who do. Individuals or companies will put money at risk if the return on the intended investment is greater than the return of holding risk-free assets. An example of this would be those that invest in real estate or purchase stocks and bonds. Those that invest want the stock, bond, or real estate to grow in value or appreciate. An example of this concept would be if an individual or company invested an amount saved over the course of a year. While investing may be riskier, these individuals hope that the investment will yield a greater return than leaving the money in a savings account drawing nominal interest. In this example the companies that issue the stocks or bonds have spending needs that exceed their income so the company will finance their spending needs by issuing securities in the capital markets. This is a method of direct finance because the "companies borrowed directly by issuing securities to investors in the capital markets" (Woepking, ¶5).
I became an enthusiast of finance ever since I was at high school. At the political economy class, my teacher asked us: if you have a million RMB, how would you use it? She then introduced us the concept of investment, and I was intrigued specifically by the stock. For the latter two years of my high school, I have been reading books and articles regarding the stock market in the U.S. and in China. As one of the outstanding students ranked top 1% in College Entrance Exam in Hainan Province, China, I was accepted by the City University of Hong Kong with a full scholarship. With the strong interest in finance, I chose quantitative finance and risk management as my major.
In turn everything in the present and the future is judged through the stocks as they hold a high importance in industrialized economies showing the healthiness of said countries economy. As investing discourages consumer spending over all decreases, it lead...
This paper will discuss the role of the financial manager and how that particular role, in the area of corporate expertise, differs from that of the shareholder and of the employee. The discussion the paper provides will help determine how the financial manager maximizes shareholder value in today's financial market. Lastly, the viewpoint of the financial manager will be compared to that of the shareholder and employee.
The stock market is an essential part of a free-market economy, such as America’s. This is because it provides companies the capital they need in exchange for giving away small parts of ownership in their company to investors. The stock market works by letting different companies sell stocks to gain capital, meaning they sell shares of their company through an exchange system in order to make more money. Stocks represent a small amount of ownership in a company. The more stocks a person owns, the more ownership they have of that company. Stocks also represent shares in a company, which are equal parts in which the company’s capital is divided, entitling a shareholder to a portion of the company’s profits. Lastly, all of the buying and selling of stocks happens at an exchange. An exchange is a system or market in which stocks can be bought and sold within or between countries. All of these aspects together create the stock market.