2 Replies to “Can anyone explain me about public share company ?”

  1. A corporation is owned by shareholders. usually the founders and venture capitalist (people who gave the initial sum of money to start the company) get the most stare. The company can issue new stocks to get new money. Other investors can buy share in the open market. If a company has 100 million outstanding shares and you bought 100 shares, then you own one millionth of the company.

    When a corporation makes a profit, the management can decide to reinvest the money into other areas, such as building a new factory. Or they can allocate some profit to pay dividend per share. Companies that pay dividends attracts investors that look for incomes. e.g. you pay $20 per share to buy to stock and get $0.20 per share dividend each quarter. Later you may sell the stock at $40 or $5 per share depending on how much its market price changes.

    Some companies, e.g. smaller high tech industry, do not pay dividend. All the money they made are put back into growing the company. Investors for this kind of companies do not care too much about dividend, they aim for better stock price when they sell. Hopefully, when the company grows, the stock value will go up. Stock prices are usually decided by the mood of the market. If everyone panic, all stock price drop regardless how well your company does. On the other hand, if the company is making a lot of money, the growing fast, the price usually goes up too.

  2. There is no term called public share company .But there r public limited companies,who have issued their shares to public.A person can become a share holder of a company by purchasing the same from the primary market(at the time of initial public offer IPO ) or by buying the same from the secondary market (share market). Those persons who hold the share of a particular company by purchasing them either through primary or secondary market r called share holders.

    The profit is distributed among the share holders by way of dividend.All the profit made by the company r not distributed to the share holders in the form of dividends.A portion is kept as reserve.The company declares a record date.Those,who hold the shares on the record date r given dividends.The dividends r sent to them in the form of cheques or is credited to the bank accounts of the share holders.

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