The stock of a corporation is its ownership; its bonds are the evidence of its funded debt. Usually, for business purposes, the stock of a company is represented by certificates, each of one or more of the shares into which the stock as a whole is divided.
All the shares of a company’s stock thus represent the whole ownership, and each share represents such part of the ownership as it is part of the whole number of shares. Shares of stock sell without entailing liability on the purchaser beyond such as is involved in a possible decline in price. The advantages in the power to transfer any part of the ownership of a concern without necessarily interfering with the conduct of the business and without the purchaser assuming risk beyond an impairment of the worth of his purchase money, are the chief causes of the strong disposition, in the last two decades, to prefer the corporate form of business to the older partnership form.
Formerly, a business man owned one concern or a certain share of it as a partner; occasionally, he might have interests in another property, but even this was rather rare. At the present time, the ability to buy and sell the stock of a corporation in small parcels has distributed the ownership of these companies among very many holders. There is now probably not a steam road of importance whose stockholders do not number well into the hundreds, while in the case of the great railways the owners are to be counted by the thousands till they reach their maximum in the number of the Pennsylvania Railroad stockholders, over 55,000 in December, 1909.
Not only is one concern owned by many persons, but, conversely, many persons may each own a small parcel of very many concerns. In this way a community of business interests arises, which reaches its apex in the case of great capitalists with interlocked holdings in very many huge corporations. Shares are often of two sorts : preferred and common. Shares of preferred stock have usually a limited claim on the yearly earnings of a corporation prior to the claims of the common stock. In the event of the company’s liquidation, preferred stock has, also, very often, preference as to the assets. Common stockholders, as a rule, get whatever earnings may be distributed as dividends after the preferred shareholders have received their limited but prior distribution. When there is but one class of stock it has, of course, all the rights of ownership.
Contents:
- THE DISTRIBUTION OF SECURITIES
- FACTORS OF SHARE PRICES
- THE TREND OF THE MARKET
- THE PRIORITY OF STOCK PRICES
- THE BANKS AND THE STOCK EXCHANGE
- THE FLOATING SUPPLY
- MANIPULATION
- RISING AND FALLING MARKETS
- THE DISTRIBUTION OF PROFIT AND LOSS IN THE MARKET
- THE PSYCHOLOGY OF SPECULATION
Stock Prices: Factors In Their Rise And Fall By Frederic Drew Bond PDF
