Basics of Stock Market –
The stock exchange is the marketplace where shares are traded. Traded prices are different to Book value or the face value. Primary Market – IPO, Secondary Market – Stock Exchange. Shareholders are part owners of the company. Equity Shares mean the value of company shared into an equal amount of shares with same face value. Some primary terms – IPO, Dividend, Bonus, Split, Face Value, Book Value, Traded Value, Equity Shares, SEBI, Share Premium, NIFTY, SENSEX (Sensitive Index). Share premium is when a company asks the market price for shares on FPO (Follow-on Public Offering). The bonus is when profit is shared as more shares and Dividend is when profit is shared as money between the shareholders. The Split is when existing shares are divided into equal parts to bring more shareholders into play.
, , Basics of Stock Market, Bonus, Book Value, bse, Dividend, equity, Face Value, FPO, IPO, Nifty, NSE, Primary market, SEBI, secondary market, SENSEX, shareholders, Split, stock exchange, Stock market, Traded Value
Hi,
Answering to your question 1 :: Who exactly are share promoters? I doubt my perception?
Promoter – one who promotes the business basically & he may be the owner of the company
Answering to your question 2 :: Can Traded price be lower than the book value?
Market price/ Trade price can be lower than Book value.
in either ways the market price will be lower than the book value
1. If the speculators has lost confidence in the earning ability of the company then market value will be lower than book value.
2. If the Market price of the company has came down due to unfortunate domestic market conditions and if that company has a good earning ability, book value lower than market price can be taken as good opportunity to buy that stock.
Hi Vignesh,
Thank you for your explanation. My doubts are clarified now.