shares finalpwrpt

8/14/2019 SHARES Finalpwrpt

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:OPIC

SHARES



I n t r o d u c t

:o n



ypes of

:hares hares can be

roadly divided:nto

quity Shares and reference Shares



quity

:hares quity share is also eferred to as ordinary

hares and in Indian ontext i t is defined by

( )ection 85 2 of the.ompanies act 1956 They

-re the real risk takers-nd care takers of the ompany and they enjoy

.he right of voting



reference

:hares apital stock which provides a pecif ic dividend that is

aid before any dividends are

,aid to common stock holders nd which takes precedence ver common stock in the

.vent of liquidation Like

,ommon stock preference hares represent part ial

,wnership in a company l though preferred stock

hareholders do not enjoy any



dvantages of:reference Shares

• -ax free status•

onsistent dividendpayments•

requency ofpayments



:isadvantages t will not move

ike ordinary.tocks t might not be the

sset type for nvestors looking

or explosiveins



ypes Of:reference Shares

-umulative and Noncumulative

-edeemable and NonRedeemable

articipating Preference-hare and non articipating

reference shares

onvertible and Non



ther types of:hares

quity Shares an be

lassified as:ollows



lue Chip:hares amed after the

-ighest value gambling

,okens in a casino lue chips are the

argest companies

hose shares are

raded on major stock.xchanges Blue chips

-end to be high

, - -rofi le house hold

ame companies with



lue chips share everal important

haracterist ics:ncluding n established record of table earning power over

everal decades n equally long record of ninte rru pted dividen d

ayments to common stock

olders history of regular

ncreases in the dividends ayable to each share

t rong balance sheets with a



igh credit rat ings in he bond and ommercial paper

arkets arge size relative to

merican businesses as whole in terms of

evenue and market apital ization iversified product

( . .,ines e g General



ncome

:hares he term can refer to shares

ought in anticipation of an bove average income being

.roduced Also referred to as.igh yield shares This

ormally means that the

nvestor has chosen shares in ompanies that have a history f paying consistently high

.ividends There is no uarantee that the companies

i l l continue to provide the



yclical and Non

:yclical share,hese terms cyclical and

- ,on cyclical refer to how

ighly correlated a ompany's share price is.o economic fluctuations

-on cyclical stocks

epeatedly outperform the arket when economic,rowth slows while

yclical companies are

ighly correlated to the



. -yclical vs Non:yclical Company



:rowth Shares hares issued by a firm

i th a consistent ecord of above average.arnings Such shares

re expected to trade

t an increasing value ver an extended

. ,eriod In many ways a

rowth share is the



peculative:hares

peculative shares are,sually small companies

.ften newly formed These ompanies are almost always

ocused on delivering– .rowth fast As

,nvestments speculative hares are high risk due to

lack of financial trength or track record in

.arnings and dividends



:alue shares value share is one that

‘ ’.ooks cheap Value shares

end to have low PE ratios .nd high dividend yields,s such value shares are

ften either defensive

(hares which typically)ave low PE ratios or(ncome shares which have

).igh dividend yields

,owever growth shares can



:uali ty shares robably the most important

lass of shares are.uali ty shares Quality hares can be found in any

.f the above categories

,ook for great management-rock solid business and,inances and a track

ecord of growth in

.rofi ts and dividends



hares can also be

:lassified as

arge Cap-id Cap

mall or icro Cap



:ONCLUSION

shares finalpwrpt

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