Historically the role of accountants remained limited to clerical work where they were meant to manage day-to-day accounting matters and record keeping. When the economic horizons expanded and firms stretched out operations beyond the boundaries of their homeland and prolonged their investments in long-term projects and ventures wrapping over many years the role of typical [...]
Secondary market is the market for trading outstanding securities among the investors. Outstanding securities means are the securities were issued in the primary market to the investors on return of amount paid to the underwriter bank. In primary market money is paid to the investors but incase of secondary market one investors pays to others [...]
Primary market also know as new issue market is the market for issuing new securities. Majority of the companies opt for issuing new share in the primary market to raise the capital for expansion of business or finance its operations depends upon company strategy. The companies sell their securities through IPO – Initial public offering [...]
A bond is a long-term debt instrument used by governments, corporations, and firms to raise debt financing. Most of the bonds have following three attributes generally.
• Pay interest annually, semiannually, or quarterly • They have defined maturity period • They have defined face value usually $100 or $1000 [...]
To capitalize upon the opportunities belonging to over the years the companies often fulfill funding requirements through long term debts from banks or financial institutions. These long-standing loans are repaid in yearly installments usually. Annual installments include principle repayments and interest payments both. For the purpose of financial accounting and matching interests over the period [...]
The shareholders buy shares with the expectations of receiving dividends and increase in the value of the shares. A conscious investor buys shares when they are undervalued and sell them when they are overvalued. Under valuation means the shares’ true value is more than their market value and overvaluation means their true value is less [...]
Just like a person working for some one expects remuneration or a landlord expects rent from tenant, the provider of funds also expects return. Two types of funds providers exist. One who takes the risk and provides funds for sharing profit or loss. The average expectancy of profit or loss is relatively high in this [...]
In general terms financial market is a mechanism of delivering savings from the households, governments, and corporations to the users of these funds. Financial markets and financial assets exist in an economy because the savings of various individuals and institutions during a period of time differ from their investment in real assets. By real assets, [...]
A fund managed by an investment company which lifts up capital from financier and invests in a pool of assets. Just like a listed company the mutual funds also raise money by selling shares of the fund and purchase various investment securities such as stocks, bonds and money market instruments. In return to the investment [...]
Management and shareholders are mainly concerned for the long term returns over investment. In a stable economy where some degree of certainty prevails companies prefer to invest in long term projects which require heavy investments initially and return is expected after or in many years to come. In a situation where inflation rates are high [...]