Arithmatical - Stock and Shares

CATEGORY

Important Facts and Formulae
1.

Stock Capital :

The total amount of money needed to run the company is called the stock capital.
2.

Shares or Stock :

The whole capital is divided into small units, called shares or stock.

For each investment, the company issues a ‘share-certificate’, showing the value of each share and the number of shares held by a person.

The person who subscribes in shares or stock is called a share holder or stock holder.
3.

Dividend :

The annual profit distributed among share holders is called dividend.

Dividend is paid annually as per share or as a percentage.

4.

Face Value :

The value of a share or stock printed on the share-certificate is called its Face Value or Nominal Value or Par Value.
5.

Market Value :

The stock of different companies are sold and bought in the open market through brokers at stock-exchanges. A share or stock is said to be :

  • At premium or Above par, if its market value is more than its face value.
  • At par, if its market value is the same as its face value.
  • At discount or Below par, if its market value is less than its face value.
6.

Brokerage :

The broker’s charge is called brokerage..

I). When stock is purchased, brokerage is added to the cost price.

II). When stock is sold, brokerage is subtracted from the selling price.