what is how it work, what is stocks how it helps the company and to the traders what is different between stock and debentures Please help me……………
CA pp jain, Shalini, and guru are discussing. Toggle Comments
BSE Sensex or Bombay Stock Exchange Sensitive Index is a value-weighted index composed of 30 stocks started in April, 1984. It consists of the 30 largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange. These companies account for around one-fifth of the market capitalization of the BSE. The base value of the sensex is 100 on April 1, 1979, and the base year of BSE-SENSEX is 1978-79.
At irregular intervals, the Bombay Stock Exchange (BSE) authorities review and modify its composition to make sure it reflects current market conditions. The index is calculated based on a free-float capitalization method; a variation of the market cap method. Instead of using a company’s outstanding shares it uses its float, or shares that are readily available for trading. The free-float method, therefore, does not include restricted stocks, such as those held by company insiders[
The index has increased by over ten times from June 1990 to the present. Using information from April 1979 onwards, the long-run rate of return on the BSE Sensex works out to be 18.6% per annum, which translates to roughly 9% per annum after compensating for inflation. The company for funding its operation raises capital and that is in the form of stocks and debentures. the stocks are the shares issued tothe public and subsequently listed on the stock exchange while debenture is a long term loan repayable with in a period as per the terms of the issue carrying a fixed rate of interest.
ensex is nothing but sensitive index. as the company’s performance grows, its value will be increased. genrally here the company should be quoted or registered in the stock exchange board. for that registration, they should follow some rules & acheive some criteria like certain % of the shares issued by them should be in the hands of public. the company should have atleast some years experience in the market. so by having all those things, they can be registered as a limited company.
after becoming the registered member, they will be provided with points based on their performance. so the floated shares in the market will be purchased by big companies. so, any demand for that company’s share makes the values of share high. if demand for that company’s share is low, then automatically the value of shares will go down. this shares can be traded by anyone in the market. so like this so many companies will be there registered here in the stock exchange board. by adding all the points of all the registered companies, they will give the sensex points.
sensex is an index no which represent the bse 30 company value.every company have its weightage.the stock means the share of the company .from the listing of shares company will get equity and traders will get benefits of this company by selling or buying the share when they want.
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