STOCK EXCHANGE

Armia P. Leonardo

Stock exchange

Refers to an entity which offering trading

services and facilitates for stock brokers and

traders, to buy and sell shares of stock and

other securities.

Considered as one of the most vital

component of a stock market.

Difference between:

STOCK MARKET STOCK EXCHANGE general term which is related to a place where stocks are traded.

more specific to the place where the trading is executed, such as BSE, NSE, NYSE, NASDAQ and so on

you buy and sell shares/equity. you are buying and selling only those stocks which are listed in the National Stock Exchange.

Terms

Broker – a businessman who buys or sells for another

in exchange for a commission.

Dividends – distribution of a portion of a company's

earnings, decided by the board of directors, to a

class of its shareholders. Dividends can be issued

as cash payments, as shares of stock, or other

property.

Role of stock exchanges

1. Raise Capital2. Mobile Savings3. Facilitates Growth4. Distribute Profit5. Improves Corporate Governance6. Creates Opportunities for Small Investors7. Facilitates Raising Capital for the Government8. Indicator of the Economy

Raise CapitalThe stock exchange offers

companies with the facility to raise

capital for expansion and other

corporate developmental projects by

selling shares to the investing public.

Mobile Savings

Mobilized money adds more

spin or causes multiplier-effect to the

economy by promoting business

activities which benefits several sectors.

Facilitates growth

The simplest and the common

way for the company to

step on a takeover bid for merger or

acquisition is through the stock

market.

Distribute profit

Profit are being shared

both by ordinary corporate

investors and speculative

investors.

Corporate Investors who are willing to wait until declaration

of dividends take place.

Speculative Investors who are practically in the real trade of

playing with the price. who actually in “haul and dump”

business.

Creates opportunities for small investors

Open to both large and small

investors.

Facilitates Raising Capital for the Government

Also serves as one of the

governments avenue to raise funds

through issuance of bonds and other

papers the latter guarantees.

Indicator of the Economy

The ugly head of economic

downturn can be spotted right away

in the behavior of the market, this

can be gleaned from the hard figures

in the stock exchange.

FINANCIAL PRESS

֎ Refers to newspaper, magazines, TV channels, broadcast program and other media specializing in financial news and updates.

֎ It is important to overall business sector.֎ It provides an avenue where the

information sources and the information seekers meet.

The end

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