Loading the lesson
Loading the lesson
Search AllRounder.ai
Search the courses, subjects, tracks, games and features, or jump straight to a page.
Search the courses, subjects, tracks, games and features, or jump straight to a page.
Learn it your way
A short class with Sarah and her students. The other ways are under More.
Sign up free to listen. Transcripts are free to read.
Welcome, everyone! Today, we're going to talk about shares. Can anyone tell me what a share is?
Isn’t a share like a piece of ownership in a company?
Exactly! A share represents a unit of ownership in a company. The more shares you own, the greater your ownership stake. Let’s remember that—think of shares as pieces of a pie!
What about the face value? How is it different from the market value?
Good question! The face value is the nominal value assigned to a share, while the market value is what buyers and sellers are willing to pay in the stock market. It's like how a collectible might have a value printed on it but could be sold for much more!
So why does the market value change?
Market values can change based on demand and supply, company performance, and investor sentiment. Keep that in mind! It's all about perception and economic conditions.
Can we summarize that? Face value is fixed, market value can change, and both relate to ownership.
Excellent summary! Don’t forget: face value is like a label, while market value reflects real-time trading!
Now let’s talk about dividends. What do you think a dividend is?
Isn’t it like a payment to shareholders?
Correct! Dividends are a part of the company's profits returned to shareholders, typically as a percentage of the face value. Think of it as your reward for investing in a company!
How do we calculate dividends?
Great question! The formula is: . It's quite straightforward, right?
Yes, but how does that relate to our investments?
The yield is crucial here! Yield measures your return on investment; it’s calculated using: .
So higher dividends mean higher yield, but it also depends on market value?
Exactly! You got it! Higher dividends can usually indicate good company performance, but if the market value increases significantly, your yield might decrease.
Can we go over how to calculate yield with a practical example?
Of course! If a company offers a ₹12 dividend on a share priced at ₹120, the yield is .
Shares can give you a little piece; Market Price will never cease.
Imagine Tommy buys a piece of a bakery. Every year, he receives a piece of profit as dividends for his share, allowing him to enjoy life like a king with his bakery rewards.
Remember S-F-M-D-Y: Shares, Face value, Market value, Dividends, Yield.
SMDY: Shares, Market value, Dividends, Yield to remember important components.
Term
What is a share?
Click to flip
Term
What does face value mean?
Click to flip
Term
Define dividend.
Click to flip
Term
What is yield?
Click to flip
A unit of ownership in a company.
The nominal value of a share, typically ₹10 or ₹100.
The price at which a share is bought or sold in the market.
The return paid by the company to shareholders, usually a percentage of the face value.
Return on investment expressed as a percentage of the market value of the share.
This section introduces shares, dividends, and their key concepts such as face value and market value, along with relevant formulas.
In this section, students learn about shares as units of ownership in a company, the concepts of face value and market value, and what dividends represent. Students will explore how to calculate dividends, yields, and investments through various formulas and examples.
In this section, we dive into the financial instruments known as shares, which represent ownership in a company. A share's Face Value (FV) is its nominal value—often ₹10 or ₹100—used for accounting purposes, while the Market Value (MV) is the price at which the share is actively traded in the market.
Dividends play a crucial role in investing, as they are the returns paid to shareholders, usually calculated as a percentage of the face value of shares. Understanding dividends helps investors assess their yield, which is their return on investment expressed as a percentage of the market value of the share. The formulas associated with this section facilitate calculating dividends, investments, and yields:
An example illustrates these concepts: If a ₹100 share is available at ₹120 and the company declares a 12% dividend, the dividend received would be ₹12, indicating a yield of 10%. This section not only covers the essential calculations but also highlights the significance of shares and dividends in the capital market.