Forex trading refers to the dealing in securities in capital markets. A money market is a setting that allows for lending and selling long term securities. There are two types of these markets. A primary one is where a company initially avails its securities to the public. A secondary one allows for existing investors to dispose of and acquire new shares and bonds.
Securities of a firm refer to the shares and long term liabilities of the firm. A share is a unit of ownership in a company. A firm usually issues this kind of security either to the public or to private shareholders. This article shall concentrate on the former option. For a firm to issue shares to the general public, it has to comply with the stock exchange regulations. The stock exchange market is where the trade of these items takes place.
A firm usually issues shares first through an initial public offer. This is where a firm allows members of the public to acquire the shares in accordance to a published prospectus. The logistics of doing this are usually great.
These institutions offer share of the company to the public and also act as underwriters. They are specialized in brokering and usually demand a substantial fee for doing this. As you can see, this process is expensive.
Debentures are long term liabilities of a firm. A long term liability is an obligation that a firm has as a result of past transactions which is to be settled by the resources of the entity. A firm acknowledges that it owes certain parties certain amounts of money.
It essentially is agreeing to paying interest accrued and a premium at the end of the term of the debenture. Entities benefit from obtaining funds as a result of issuing bonds and shares. The interest paid on bonds is usually tax exempt.
Shareholders are effectively owners of the company whereas bond holders are not. A share is a unit of ownership in the company. Managers of the firms therefore act as agents of shareholders. Their work is to maximize shareholder wealth. This is measured in terms of capital movements in share prices in Forex trading markets and payment of dividends. Bond holders on the other hand have the right to be paid interests irrespective of the company performance.
Securities of a firm refer to the shares and long term liabilities of the firm. A share is a unit of ownership in a company. A firm usually issues this kind of security either to the public or to private shareholders. This article shall concentrate on the former option. For a firm to issue shares to the general public, it has to comply with the stock exchange regulations. The stock exchange market is where the trade of these items takes place.
A firm usually issues shares first through an initial public offer. This is where a firm allows members of the public to acquire the shares in accordance to a published prospectus. The logistics of doing this are usually great.
These institutions offer share of the company to the public and also act as underwriters. They are specialized in brokering and usually demand a substantial fee for doing this. As you can see, this process is expensive.
Debentures are long term liabilities of a firm. A long term liability is an obligation that a firm has as a result of past transactions which is to be settled by the resources of the entity. A firm acknowledges that it owes certain parties certain amounts of money.
It essentially is agreeing to paying interest accrued and a premium at the end of the term of the debenture. Entities benefit from obtaining funds as a result of issuing bonds and shares. The interest paid on bonds is usually tax exempt.
Shareholders are effectively owners of the company whereas bond holders are not. A share is a unit of ownership in the company. Managers of the firms therefore act as agents of shareholders. Their work is to maximize shareholder wealth. This is measured in terms of capital movements in share prices in Forex trading markets and payment of dividends. Bond holders on the other hand have the right to be paid interests irrespective of the company performance.
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