Business Studies: Shares, Shareholders & Share Price

Flashcards covering key concepts related to shares, shareholders, and share price from business lecture notes.

How do shareholders in an Ltd or PLC earn rewards from their investment?

They earn rewards through dividends, which are a percentage of the profits made.

What are most shares issued by a company called, and what does it mean?

They are called 'Ordinary shares', meaning anyone can buy them on the stock market, not just specific groups of investors.

What factors determine a company's share price?

The share price is determined by the business's profit levels, its success, the economic climate, the market in which it operates, and the principles of supply and demand.

What is market capitalisation and how is it calculated?

Market capitalisation shows a company's current market value and is calculated by multiplying the share price by the number of shares issued.

What are internal factors that could influence whether a company's share price rises or falls?

Factors within a company's control include its financial performance.

Why doesn't the share price of an Ltd change as regularly as a PLC?

Because shares in an Ltd aren't constantly bought and sold on the stock market; they have to invite investors, typically resulting in fewer investors and less frequent trading.

What is 'flotation'?

Flotation occurs when a business changes from an Ltd to a PLC.

What is 'equity finance'?

Equity finance refers to the money raised by issuing shares.