1. The Stock Market

2. What is a Stock?
 Name used to describe money raised by a joint stock
company or corporation, or a government.

3. Who Owns the Company?
 Shareholders: any person or organization that buy and
hold shares in a joint stock company.

4. What is
Market Capitalization?
 The market value of all shares or equity issued by a
company.

5. Why Buy Stocks?
 As an investment, hoping stock prices will rise over
time.
 Shareholders are entitled to a share of any profits
made by the companies they own. The profit is called
a dividend.
 The more shares a stockholder holds, the more
dividend he/ she receives.

6. Permanent Capital
 Money raised from the issue and sale of shares is NOT
a loan.
 Shareholders have to sell their shares to get their
money back.

7. Where to Buy/ Sell Shares?
 New York Stock Exchange (NYSE)
 National Association of Securities Dealers Automated
Quotations (NASDAQ)
 Tokyo Stock Exchange
 London Stock Exchange
 Shanghai Stock Exchange
 Hong Kong Stock Exchange
 Major stock exchanges: as at 31 December 2011

8. What is a Floatation?
 Involves a new company issuing shares for the first
time for sale through a stock exchange.

9. What is a Bond?
 Governments can raise money to finance public
expenditure through the sale of government loan
stocks or bonds.

10. Functions of a
Stock Exchange
 A business organization that enables
individuals, companies and governments to buy and
sell shares on the global stock market.
 Most important source of finance for most companies.

11. Functions of a
Stock Exchange
 It brings together buyers and sellers of new and
second-hand stocks.
 It provides up to the minute information on the market
prices of different stocks and quantities traded.
 It supervises the conduct of firms of brokers that buy
and sell shares on behalf of investors.

12. Functions of a
Stock Exchange
 Most trading in stocks and shares is now conducted
electronically.
 The NASDAQ was the first electronic stock
exchange, founded in 1971.
 http://www.nasdaq.com