the role of shareholders/why they invest+ share price

  • shareholders

  • provide finance for a business

  • share capital- amount of money shareholders invest

  • equity shareholder- owns part of a business

  • they have an influence in decision making

  • are not guaranteed dividends

  • receives a percentage of any profits generated

  • have the potential to profit from the company if they're successful

  • want to get a return on their investment

  • may decide to purchase shares if they believe the share price will later increase/ or if they agree with a businesses aims and values

  • influences on share price

  • -state of economy

  • inflation/ interest rates/ consumer spending

  • -competition

  • can be risky to have a high share price as they might be more likely to invest in competition

  • -proposed takeovers

  • -investor expectations

  • investors will use a high share price as a measure of success of the business

  • -performance of economy

  • economic growth gives individuals confidence in the market which may increase demand for shares

  • -business performance

  • greater performance increases demand

  • -response to rumors

  • being accused of involved in scandals can affect demand for shares as it creates a bad reputation