Role of shareholders

Created by: hamishc
Created on: 29-04-16 21:26

What is a shareholder?

Anyone who owns at least one share in a company. They have limited liability (they can only loose money on the shares they invested).

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Who can shares be bought by in PLC's?

Individuals, companies or institutions.

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Who can shares be bought by in Ltd's?

Family and freinds.

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Why do companies want sharesholdesr?

They provide funds.

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What is a majority shareholder?

Someone who owns more than 50% of the shares.

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What is a dividends?

A portion of the business's profits.

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Why do shareholders invest in companies?

To acheive capital gain (buy when low, sell when high), for a dividend, to be involved in the running of a business, they may have social/ethical/ environmental aims or objectives, to help the company grow or survive, they are venture capitalists.

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How are the share prices of Ltd's determined?

A share price is agreed upon by the potential owner and potential investors based on the current business performance.

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How are the share prices of PLC's determined?

They are determined by demand and supply on the stock market.

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What is demand and supply?

If more people want to buy a share than sell it (demand is higher than supply), the share price goes up, and vice-versa.

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What are the factors influencing demand and supply?

Performance of business (bigger dividends, increased demand), speculation (rumours of new products sparks investor interest), current share price (more buying of shares when low), interest rates, the economy (strong, more money to invest, confidence)

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Other cards in this set

Card 2

Front

Who can shares be bought by in PLC's?

Back

Individuals, companies or institutions.

Card 3

Front

Who can shares be bought by in Ltd's?

Back

Card 4

Front

Why do companies want sharesholdesr?

Back

Card 5

Front

What is a majority shareholder?

Back

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Role of shareholders