Stocks are one of the best known and most popular financial instruments in the world, but what exactly are they and how do they work? In this article, we will try to provide a complete guide to actions in economics, law and finance, explaining their meaning, the methods of issuance and trading, the types of shares that exist and much more.
Table of Contents:
What are stocks in economics
In economics, shares represent a share owned by a company, or a fraction of the company’s share capital.
Those who buy a share, therefore, become a shareholder and are entitled to part of the profits generated by the company, as well as to participate in corporate decisions through the right to vote at the shareholders’ meeting. Shares may be issued by limited liability companies, such as joint stock companies (SPAs) or limited limited liability companies (SAPA), and may be traded on stock exchanges or regulated markets. Buying shares can represent a long-term investment, but also a source of income through speculation on the stock market.
Issuance of shares meaning
The issuance of shares is the process by which a company decides to increase its share capital, or the total value of the shares issued. This can happen for several reasons, such as to finance new investments or to restructure the company’s debt. The issuance of shares may take place through an initial public offering (IPO) or through a capital increase reserved for existing shareholders (right of option). In both cases, the company must comply with the rules established by law and supervisory authorities, in order to guarantee transparency and investor protection.
What are shares in bond law meaning
In law, shares are considered credit securities, or financial instruments that attest to the existence of a credit right against the issuing company. In this sense, shares are similar to bonds, but while the latter represent a loan provided by the investor to the company, the shares represent a share owned by the investor in the same company. Shares may be subject to various forms of legal protection, such as the protection of shareholder rights, the regulation of buying and selling transactions, the transparency of information and the prevention of financial fraud.
Action definition finance
In finance, stocks are considered one of the most important and widespread financial instruments, thanks to their ability to generate high returns in the long term. The investment in shares can be made both by individuals and by financial institutions, through various instruments such as mutual funds or managed portfolios. Shares can be classified in different ways, based on the characteristics of the issuing company, the type of voting rights conferred on shareholders, the mode of trading on the stock exchange, and so on. Some examples of types of shares are ordinary shares, preferred shares, savings shares, multi-voting shares and shares without voting rights.
Types of shares on the stock exchange
On the stock exchange, shares can be traded through various markets, such as the MTA (Electronic Stock Market) market or the AIM (Alternative Investment Market) market. Shares can be traded in real time, through online platforms or through authorized financial intermediaries. The types of shares tradable on the stock exchange are many and vary depending on the issuing company, market capitalization, liquidity and volatility of the stock. Some stocks are suitable for long-term investors, while others are better suited to investors seeking quick gains through speculation.
Savings actions
Savings shares are a particular type of stock that involves a reduction in shareholders’ voting rights, in exchange for a greater right to dividends. This type of stock is often issued by companies that seek to protect the control of the company by a small group of shareholders, or that want to encourage long-term savings.
In conclusion, stocks represent a fundamental tool for investment and the management of financial assets, but they require adequate knowledge of the rules and dynamics of the market. To invest in stocks wisely, it is important to carefully evaluate the risks and opportunities offered by the stock, and always seek the support of professionals in the sector.
