Equity Shares

sunandaC

New member
Total equity capital of a company is divided into equal units of small denominations, each called a share.

For example, in a company the total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share.

Thus, the company then is 11 said to have 20, 00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.

There are two ways of investing in equity.

1. Investment through primary market.

2. Investment through secondary market.

1. Investment through primary market:

The primary market provides the channel for sale of new securities.

Primary market provides opportunity to issuers of securities; Government as well as corporate, to raise resources to meet their requirements of investment and/or discharge some obligation.

They may issue the securities at face value, or at a discount/premium and these securities may take a variety of forms such as equity, debt etc.

They may issue the securities in domestic market and/or international market.

In the primary market equity share can be issue by following ways:

2. Investment through secondary market:

Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange.

Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. For the general investor, the secondary market provides and efficient platform for trading of his securities.


Thus, in the primary market, securities are offered to public for subscription for the purpose of raising capital or fund.

Secondary market is an equity trading venue in which already existing/ pre – issued securities are traded among investors

. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, over – the – counter (OTC) is a part of the dealer market
 

rosemarry2

MP Guru
Total equity capital of a company is divided into equal units of small denominations, each called a share.

For example, in a company the total equity capital of Rs 2,00,00,000 is divided into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share.

Thus, the company then is 11 said to have 20, 00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.

There are two ways of investing in equity.

1. Investment through primary market.

2. Investment through secondary market.

1. Investment through primary market:

The primary market provides the channel for sale of new securities.

Primary market provides opportunity to issuers of securities; Government as well as corporate, to raise resources to meet their requirements of investment and/or discharge some obligation.

They may issue the securities at face value, or at a discount/premium and these securities may take a variety of forms such as equity, debt etc.

They may issue the securities in domestic market and/or international market.

In the primary market equity share can be issue by following ways:

2. Investment through secondary market:

Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange.

Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. For the general investor, the secondary market provides and efficient platform for trading of his securities.


Thus, in the primary market, securities are offered to public for subscription for the purpose of raising capital or fund.

Secondary market is an equity trading venue in which already existing/ pre – issued securities are traded among investors

. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, over – the – counter (OTC) is a part of the dealer market
Hey friend,

Here I am up-loading Notes on Risk-Return Relationship on Equity Shares in India, please check attachment below.
 

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