Micro economics Term Paper Example | Topics and Well Written Essays - 2250 words

Micro economics - Term Paper modelingAside from transmission lines and bonds, other investment instruments atomic number 18 mutual funds, stock options, and other financial derivative securities, which are briefly defined and described here.A stock is ownership of a corporation re marched by shares that are a claim on the corporations earnings and assets (Downes, John & Goodman, Jordon Elliot, p. 556, Barrons educational Series). The price of a stock is the equivalent of the present value of all future dividends it is also the present value of a dividend stream for the number of years it would have been held, plus the present value of the pass judgment price of the stock after that time period (Block, Stanley B. & Hirt, Geoffrey A., p. 284, McGraw-Hill Irwin).Common stocks entitle the shareholder to received dividends in stocks and bonds, and to vote in the election of directors and other matters taken up at shareholder meetings or by proxy (Downes, John & Goodman, Jordon Elliot, p. 556, Barrons Educational Series).The stock market is the general term referring to the organized business of securities through the various exchanges and the over-the-counter market (Downes, John & Goodman, Jordon Elliot, p. 563, Barrons Educational Series). It is likely that the role compete by the market in gathering and disclosing information may be more important for long firms because their stocks are traded more often and are followed by many analysts (Demirguc-Kunt, Asli & Maksimovic, Vojislav, p. 49, Finance & Development). Small firms may non benefit as much from stock market development, at least initially, because their access may be limited by high fixed issuance costs (Demirguc-Kunt, Asli & Maksimovic, Vojislav, p. 49, Finance & Development). Even the stock of niggling firms that are listed on an exchange may not be traded as often as the stock of larger firms, since it