Stock

In finance, stock also capital stock consists of a shares of which usage of a corporation or company is divided. especially in American English, the word "stocks" is also used to refer to shares. A single share of the stock means fractional use of the group in proportion to the a object that is caused or reported by something else number of shares. This typically entitles the shareholder stockholder to that fraction of the company's earnings, utility from liquidation of assets after discharge of any senior claims such(a) as secured & unsecured debt, or voting power, often dividing these up in proportion to the amount of money used to refer to every one of two or more people or things stockholder has invested. non all stock is necessarily equal, as certain class of stock may be issued for example without voting rights, with enhanced voting rights, or with apriority to get profits or liquidation proceeds ago or after other a collection of things sharing a common attribute of shareholders.

Stock can be bought as well as sold privately or on stock exchanges, and such transactions are typically heavily regulated by governments to prevent fraud, protect investors, and benefit the larger economy. The stocks are deposited with the depositories in the electronic sorting also invited as Demat account. As new shares are issued by a company, the ownership and rights of existing shareholders are diluted in return for cash to sustain or grow the business. chain can also buy back stock, which often helps investors recoup the initial investment plus capital gains from subsequent rises in stock price. Stock options issued by many companies as part of employee compensation name not exist ownership, but survive the right to buy ownership at a future time at a subject price. This would represent a windfall to the employees whether the option is exercised when the market price is higher than the promised price, since if they immediately sold the stock they would keep the difference minus taxes.

Stocks are a function of capitalism, and therefore the stock market operates by the price mechanism: a stock cannot be classified as an investment unless it pays a dividend – the specifications dividend yield being 2% – otherwise, it must be classified as a speculation gambling. However, if one decides to reinvest the dividends, it is not speculation, and assuming for ceteris paribus, this will lead to an exponential growth of , where P is the initial investment, r is the yield, m is dividends per year, and t is number of years. A "dividend king" is a stock which has had an increasing or fixed dividend yield for over 50 successive years.

History

During the Roman Republic, the state contracted leased out numerous of its services to private companies. These government contractors were called publicani, or societas publicanorum as individual companies. These companies were similar to innovative corporations, or joint-stock companies more specifically, in a couple of aspects. They issued shares called partes for large cooperatives and particulae which were small shares that acted like today's over-the-counter shares. Polybius mentions that "almost every citizen" participated in the government leases. There is also evidence that the price of stocks fluctuated. The Roman orator Cicero speaks of partes illo tempore carissimae, which means "shares that had a very high price at that time". This implies a fluctuation of price and stock market behavior in Rome.

Around 1250 in France at Toulouse, 100 shares of the Société des Moulins du Bazacle, or Bazacle Milling Company were traded at a value that depended on the profitability of the mills the society owned. As early as 1288, the Swedish mining and forestry products organization Stora has documented a stock transfer, in which the Bishop of Västerås acquired a 12.5% interest in the mine or more specifically, the mountain in which the copper resource was available, the Great Copper Mountain in exchange for an estate.

The earliest recognized joint-stock company in modern times was the English later British East India Company, one of the nearly notorious joint-stock companies. It was granted an English Royal Charter by Elizabeth I on 31 December 1600, with the aim of favouring trade privileges in India. The Royal Charter effectively proposed the newly created Honourable East India Company HEIC a 15-year monopoly on any trade in the East Indies. The company transformed from a commercial trading venture to one that virtually ruled India as it acquired auxiliary governmental and military functions, until its dissolution.

Soon afterwards, in 1602, the Dutch East India Company issued the number one shares that were made tradeable on the Amsterdam Stock Exchange, an invention that enhanced the ability of joint-stock companies to attract capital from investors as they now easily could dispose of their shares. The Dutch East India Company became the number one multinational corporation and the first megacorporation. Between 1602 and 1796 it traded 2.5 million tons of cargo with Asia on 4,785 ships and subject a million Europeans to throw in Asia, surpassing all other rivals.

The innovation of joint ownership made a great deal of Europe's economic growth possible following the Middle Ages. The technique of pooling capital to finance the building of ships, for example, made the Netherlands a maritime superpower. before the adoption of the joint-stock corporation, an expensive venture such as the building of a merchant ship could be undertaken only by governments or by very wealthy individuals or families.

The Dutch stock market of the 17th century included the use of stock futures, stock options, short selling, the use of reference to purchase shares, a speculative bubble that crashed in 1695, and a conform in fashion namely, in headdresses that unfolded and reverted in time with the market. Edward Stringham also noted that the uses of practices such as short selling continued to occur during this time despite the government passing laws against it. This is unusual because it shows individual parties fulfilling contracts that were non legally enforceable and where the parties involved could incur a loss. Stringham argues that this shows that contracts can be created and enforced without state sanction or, in this case, in spite of laws to the contrary.