mrs parkin- topic 1; issues understanding business forms

Question 1

ordinary shareholder

Answer 1

they have a percentage if the ownership in the company. also known as the common share; they may not have a dividend

Question 2

preference shareholder

Answer 2

they often may not have voting rights. they can have shares of a company stock in the form of dividends

Question 3

institutional shareholders

Answer 3

they own the majority of the shares a company e.g. banks, pensions, companies

Question 4

what is a role of a shareholders

Answer 4

they invest capital to survive and grow. they have an influence at the vote at the AGM(Annual general meeting held by the board of directors)
becoming a shareholders might mean that they would receive rewards (dividends, increase in share price)

Question 5

how much influence do shareholders have?

Answer 5

1) depends on their percentage of ownership - if percentage is high they can raise issues to the board of directors and some may attend the AGM or vote by proxy
2 higher percentage of shares = can give more opinion
3) the effect of sales of shares by shareholders is vitally important, so if price of shares goes down - supply going up - price will go down

Question 6

what influences share price?

Answer 6

1) profit/ loss
2) launch of a new product
3) confidence in a business - seeing if the business physically succeeding or failing
4) takeover
5) economic conditions
6) current market trends

Question 7

what are the short term effects on share prices

Answer 7

short term: if shareholders want to buy/sell shares for short term capital gain - meaning that they get money now and then cos its short term. so if price increases = make money when selling shares and if prices are decreasing = loss, shareholders might want to keep share until the share price goes back up

Question 8

what are the long tween effects on share prices

Answer 8

long term: shareholders that by shares as a long term investment - less likely to be affected by the short term price changes cos shareholders are keeping the share longer than the ones who have a share for the short term, so in the future the share price might increase again

Question 9

market capitalisation (market cap)

Answer 9

share price x number sold

Question 10

shareholder rewards

Answer 10

-given in pennies per share higher the share = bigger dividends
how many shares x how much its selling per share

Question 11

don’t know the title for this equation

Answer 11

net profit/ total dividend paid