Financial English 6.ppt

Financial English 湖北经济学院国际金融教研室 刘畅 Chapter 6 —Stock Market Course Structure Share-holding Company Basis of Stocks Price Valuation of Stocks Issuance of Stocks Negotiation of Stocks Basis of Investment Analysis 1. Share-holding Company Since the stock market is an important component of share-holding system, some basic concepts about share-holding company should be introduced at the beginning of this chapter. Modern share-holding system is consisted of three essentials including share-holding company, stocks, and the stock market. 1. Share-holding Company It is an organizational and property form. With this system, funds and capital could be gathered from different investors by paying company’s share. The raised funds could be allocated and used by the management of company. Also investors are able to get involve with the management of company and the allocation of dividends. 1. Share-holding Company Characteristics of Share-holding The ownership and the management right are separate. The company owners are diversified and changeable. Strong social restriction The ownership and the management right are separate In a share-holding company, as long as someone becomes a stockholder, he or she namely has a claim on all the profits and assets of the company. He or she can obtain some kind the dividend or bonus, transfer or sell the shares they have, but not drawing their money out of the company. They can be called to a convention of stockholders and vote for important events, but not intervene daily operations. The company owners are diversified and changeable In those companies we called proprietorship or partnership; owners are more likely single or fixed few people. However, in a share-holding company, all the owners are diversified and changeable because stocks are normally issued for various social investors and are frequently transferred among those social investors. The separation of ownership and management right also could be enhanced