It is very easy to make money in the stock market in the same way is also you lose money in the stock market. This can be avoided if you collect information about the stock market, the research and hire a best firm in investment advisory for beneficial tips.
Here are some fundamentals things you must know
Equity Share –
Equity share is also called share or stock. A certain fraction of the company’s share is expressed by equity share. Share holder is business partner in profit or loss in equity share, in proportion to their share of the fund of company. Equity share holder of the company can express his views, proposals and have the rights to vote.
Shares Rights Issue –
When a company offers to its existing shareholders new shares in proportion to their shareholding is said as shares rights issue. Shareholders got a right to buy share’s right but it depends on his will that he use it or not. The company may also issue other securities in the rights issue.
Rights of Equity Shareholders –
Equity shareholders are also said to be business partner of the Company .Therefore they have rights to know the company’s financial results and financial position. Equity shareholder is entitled to know balance sheet and annual report, including a full explanation for it every year. To change any policy, issuing new shares company has to seek shareholders’ approval. For this once in a year they gathering are essential to the resolution passed at meetings of the Board of Directors. Notice of annual meeting with shareholders like to be sent a copy of these proposals so that they could get it before the annual meeting. Shareholders have the right to vote or go against these proposals and their views. Shareholders have rights to examine various important document and accounting books as well.
Bonus Share –
Bonus shares are generally mean as the extra shares given to the shareholders without any additional cost that is based upon the number of shares that a shareholder owns.
The company’s total annual profits not distributed as dividends. Some part of this is feed to the accumulation account and in a few years this amount becomes large. The company plans for its future development plan and amount transferred into the capital account as bonus shares to the existing shareholders of the same amount given is beyond the rational basis.
Preference share –
Shareholders holding shares of such a dividend is paid annually to the predetermined rate. The dividend is paid out of company profits. But it is paid before given dividend payment to shareholders equity.
Cumulative preference shares –
Dividend is not paid to such shareholders annually at a predetermined rate, but it is accrued to the company. Dividend is paid to Cumulative preference shareholders before equity shareholders.
Cumulative convertible preference shares –
It is a sort of preference shares where dividend is payable with a fixed rate on the same accumulates. If not paid within a specific time then those shares are automatically converted into equity shares.
To Buy Equity Shares –
From the primary market while public offer (IPO or FPO) by the application or directly through the stock market recognized broker, you can buy shares in the secondary market.
Primary Market –
Primary market is the market that deals with issuing of new securities. Governments, Companies, corporations or public sector institutions can get funds through the sale of a new stock for different purpose.
The Primary Capital Market is also known as New Issue Market (NIM).
Secondary Market –
Capital Market is categorized into two different markets. These are the Primary Capital Market and Secondary Capital Market.
After the allocation of shares by public issues the company makes them listed on registered stock exchange. After listing through public issue (IPO) or Follow-on-Public Offer (FPO) allotted shares can be sales or purchase in Primary Market and all this functionality are included in Secondary market.
In other words, if someone takes shares directly from the company by applying the behavior is called the primary market. But if he buys shares from other shareholders and sells, that behavior is called the secondary market. Technically, the secondary market is the stock market. Primary and secondary markets combine and make the capital market of country.