11 Questions
What is the primary reason companies sell shares through IPOs?
To raise capital for growth and expansion
What is the main purpose of a stock split?
To make shares more affordable to investors
How do stock values generally respond to company growth?
Increase in value
Which factor can influence stock prices based on the information provided?
Quality of the company image
What role do stock exchanges like NYSE and Nasdaq play in the global stock market?
They facilitate trading of securities globally
What distinguishes common stocks from preferred stocks?
Common stocks have voting rights while preferred stocks receive preferences in dividends.
How can an individual invest in the stock market?
By opening a trading account with providers like Etrade or Robinhood.
What determines the price fluctuations of stocks in the market?
Supply and demand dynamics.
Why do companies sell stocks through initial public offerings (IPOs)?
To raise operating capital.
What is one advantage of investing in the stock market over keeping money in a bank account?
Potential for higher returns.
Why is research considered essential before investing in stocks?
To make informed decisions about which stocks to purchase.
Study Notes
- Stock market is a global network where securities are traded, representing ownership in companies.
- Companies sell shares through IPOs to raise capital for growth and expansion.
- Stock exchanges like NYSE, Nasdaq, TSX, NSE, and JPX facilitate trading globally.
- Share values reflect company performance; growth increases share value.
- Stock splits occur when share prices become too high, making shares more affordable.
- Example: Apple had multiple stock splits, increasing number of shares while lowering individual share price.
- Stock prices can be influenced by factors like company image, supply and demand, leading to daily fluctuations.
Explore the fundamentals of the stock market, including how companies raise capital, the role of stock exchanges, factors influencing stock prices, and the impact of stock splits on share values.
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