Taking a stock market listed company back into private ownership is though rare, but when it is done the aim is usually to strengthen control over decision-making process. However, some owners prefer to keep control in their hands by staying private, while others may buy back all company shares and return the company to private ownership. The advantage to the original owners is that they can realise very large sums of cash if the offering is successful. There are strict rules of going public, the company must be worth buying. Later when they expand, the owners may opt to go ‘public’ and sell some shares on the stock market. Companies normally start out by being privately owned. Finally, there are the “penny shares”, which belong to companies with a low value, but which may increase for some reason or the other.Į. “Growth stocks” are shares in newer companies that are supposed to do quite well in the time to come, but which may not do so. These have slightly low confidence than the blue chips. The other term – ‘secondary issues’ are shares in solid companies. The world of the casino gave it the name Blue chips, where they are those with the highest value. The strongest, best-established companies are known as ‘Blue chips’. Thus, people who want to increase their assets must learn how it works, and will decide to participate in the system at some point in their lives. Since the 1990s, there has been no other system competing with it. The capitalist financial system’s big business is central to the world’s present economic system. In the long term, shares in reputed companies are thought to be good investments than those in bad companies.ĭ. This kind of volatility is a temporary phase. If huge chunk of investors think the price of a share is going to rise and buy it, the price of the share will rise until they stop buying. One of the main factors is the behaviour share holders. A lot of factors influence the share price, including company analysis, change in politics, natural disasters, cold wars and economic up-downs.
Shares are a volatile property- their prices do not remain steady as people buy and sell them continuously. The constantly changing difference between the market capitalisation (the total value of all a company’s shares at the current market price) and the ‘real’ value is one of the great topics of stock market evaluation.Ĭ. As such, there are new challenges to valuation like how do you value a high-tech company whose products keep on changing every two months, and whose bread earners are its talented employees? In contrast, when the stock markets is climbing, many companies are valued at sky high prices in the stock market than their real value. In cases where the company owned buildings were grossly undervalued than it should have been.
The price of a share gets regularly updated it may have not much relation to the cash value of the company if all its assets gets sold. You can sell your shares anytime you want.ī. when you buy one, you become partner, or shareholder in the company, and share profits, attend board meetings and vote on key issues and appointments. Among different types of shares, the most common are called ‘ordinary shares’. A large company may issue tens of millions of shares.
A company which is registered on the stock exchange offers shares under its ownership to anyone who wants to buy them. You should spend about 18-20 mins on questions 1-14.
4 Conclusion IELTS Academic Reading Practice Test 2021 pdf – Passage 1.3 IELTS Academic Reading Practice Test 2021 pdf – Passage 3.