Stocks and Shares
Companies can issue stocks or shares to raise capital to expand their operations. Companies use an investment bank to find buyers, and to underwrite the stock issue. Stocks and shares are also known as equity or equities; the most common form is called common stock in the US and ordinary shares in Britain. After shares have been issued they can be traded on the secondary market at the stock on which the company is quoted. Stock prices rise and fall depending on supply and demand. Companies distributes part of their profits to shareholders as an annual dividend, or keep the profits in the company. Stocks markets are measured by stock indexes which show changes in the average prices of a selected group of important stocks.