Of Stocks, Stockholders And Stock Market

A copper mining enterprise Stora Kopparberg first introduced the system of stock in the 13th century. The financial backers and owners felt the need to raise money for investment in the new projects of the same company so they started the method of stock and shares. It was also required in order to ward off the threat to the ownership rights if the company was sold- which would mean complete loss of control.

The investors got the monetary support they were looking for and at the same time solved ownership issues in case the company was sold by granting stocks to the people. Plus- they sold a part to people and still retained control over the company. Thus- the owner had some portion of the assets- some power to make decision conditionally. In return- they shared a part of the profit with the stockowner as dividend.

Finance

Of Stocks, Stockholders And Stock Market
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Financially- stock implies the ownership or share in a corporation. It gives the stockowner the right to claim a share in the assets and income of the corporation. The two types of stocks- preferred and common differ in many respects. The common stock owners can vote at the shareholders/' meetings whereas the preferred stockowners cannot vote. Common stockowners get dividends declared by the company- whereas preferred stock owners have higher claim in assets and income of the company. Preferred stock entitles the owner to have his dividends earlier than the common stock owner. Preferred stock owner gets the priority when the company goes bankrupt. Besides these two- the other types of stock are dual class shares and treasury stock.

A stockowner is not liable to losses in case the company closes and has loans to pay back. The loss of the stockholders is limited to the money that would have been made by converting the assets into cash since all the money would be used to repay the loans to the creditors.

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There are various methods to buy or sell finance stocks- but the commonest among them is through the mediator called stockbroker- who actually transfers the shares from one owner to another. Stocks can be bought directly from the company also.

The stock market of a country is an indicator of its economy- which just goes to show the growth and power of the stock market.

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Of Stocks, Stockholders And Stock Market