In order to understand what stocks are and how stock markets work, we history--specifically,
the history of what has come to be known as the corporation, or sometimes the limited
liability company (LLC).
The first corporate charters were created in Britain as early as the sixteenth century,
but these were generally what we might think of today as a public corporation owned
by the government, like the postal service.
Privately owned corporations came into being gradually during the early 19th century
in the United States , United Kingdom and western Europe as the governments of those
countries started allowing anyone to create corporations.
Stocks
A corporation is generally entitled to create as many shares as it pleases. Each share is a small piece of ownership. The more shares you own, the more of the company
you own, and the more control you have over the company's operations.as an example
if you have more share in company as compared to other you are the ownner of the
company as compared to other share holder in company.
Stock means :
A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.
Also known as "shares" or "equity".
Public Markets
How each stock market works is dependent on its internal organization and government
regulation.
When a corporation decides to go public, after filing the necessary paperwork with
the government and with the exchange it has chosen, it makes an initial public offering . The company will decide how many shares to issue on the public market and the
price it wants to sell them for. When all the shares in the IPO are sold, the company
can use the proceeds to invest in the business.
The Term Net Asset Value (NAV) is used by to measure net assets. It is calculated
by subtracting liabilities from the value of a fund's securities and other items
of value and dividing this by the number of outstanding shares. Net asset value
is popularly used in newspaper mutual fund tables to designate the price per share
for the fund.
Calculating NAVs - Calculating mutual fund net asset values is easy. Simply take
the current market value of the fund's net assets (securities held by the fund minus
any liabilities) and divide by the number of shares outstanding. So if a fund had
net assets of Rs.70 lakh and there are one lakh shares of the fund, then the price
per share (or NAV) is Rs.70.00.