Stocks Essay Example | Topics and Well Written Essays - 1000 words

Stocks - Essay Example(Maunder 3rd Ed).However Common Sh beholders are authorize to rights of pre-emption in the event of the company decision of offering more business.Preferred StockPreferred Stock pertains to the philosophy of hybrid security, that is where on that point is a payment of a fixed dividend to its owners and this dividend does not fluctuate(it does not have to be paid this dividend if. Preferred armoury can be either Cumulative( that is self-aggrandising its owners the right to accumulate dividend payments missed before),Non-Cumulative (where no payment is made available for skipped dividends),Participating( computer storage with a higher rate of dividend) and Convertible(to shares).Trading in stocks is carried out at the stock exchange, by individual investors and hedge fund traders. However trading in stocks is no longer limited to the interaction at the Stock Exchange and stocks are also auctioned at the open stock exchange through Open Outcry and share purch ases can also be made online.An example of the tangible/conventional stock exchange model is New York Stock Exchange which is a listed exchange.How are stocks traded on a listed exchangeOrders for the purchase of stock are entered through the exchange members and go on to the specialists Once a purchase has been made the specialist will close the difference taking into amount the while considerations.The details of the trade are recorded and sent back to the relevant brokerage firm.The modern day physical stock exchange is also exceedingly computerised.An example of virtual listed exchange is NASDAQ which includes trading only over the computer and the traders will be matched through the computer system. Another example of an electronic stock exchange is the The Paris Bourse. Why are stocks and stock markets an integral part of the EconomySignificant source of funding for large companies in a earth way as stocks present a fairly liquid investment option unlike investment in prop erty etc.Rising stock prices indicate a booming economy and good business investment.Stock prices are on the top agenda of financial regulators like the state/ key bank as any unusual variation in these prices will adversely affect the health of the economy.Therefore the smooth exchange of stocks and shares facilitates entrepreneurial victor and long term success in an economy.Currently there is an increased trend of investing in stocks rather than government based securities like bonds etc in the developed economic systems like