What is share?how one can earn profit by share & trade? where does the money go if i loss it in share market?

Everyone wants a piece of the market. And why not? MedlinePlus MedlinePlus But do you know how to reward the actions of an investor? MedlinePlus MedlinePlus If you are a shareholder, there are two ways you can benefit from the profits of a company: capital appreciation and dividends. Read on to understand how the actions will reward you. MedlinePlus MedlinePlus Dividends, dividends
! MedlinePlus Usually, a company distributes some of the profits obtained in dividends. MedlinePlus MedlinePlus Let's say a company made a profit of Rs 1 crore (Rs 10 billion) in 2004-05. MedlinePlus MedlinePlus Remains half that amount within the company. This is used for a variety of purposes - to buy more machinery, land or raw materials, construction of a new factory or a new office building. It could even be used to repay loans. MedlinePlus MedlinePlus The other half will be distributed as a dividend. MedlinePlus MedlinePlus Suppose the company has 10,000 shares. This would mean that half of the gain - that is Rs 50 lakh (Rs 5 million) - is divided by 10,000 shares MedlinePlus. MedlinePlus So each party could win 500 rupees. The dividend would then be Rs 500 per share. MedlinePlus MedlinePlus If you own 100 shares of the company, you will receive a check for 50,000 rupees (100 shares x Rs 500) of the company. MedlinePlus MedlinePlus I never I have a high dividend! MedlinePlus MedlinePlus We will retract a little. When the company issues shares, gives a basic value for each action - say Rs 10. This is known as the nominal value of the share. MedlinePlus MedlinePlus When trading in the stock market, however, this value can go up or down, depending on supply and demand of the population. MedlinePlus MedlinePlus The value of a share in the market at any point of time is called the stock price or the market value of a share. MedlinePlus MedlinePlus A stock with a face value of 10 rupees, may be quoted in Rs 55 (higher than the nominal value), or even Rs 9 (below face value). MedlinePlus MedlinePlus Companies often decide to take the dividend as a percentage. So the company can declare a dividend of 50%. This dividend is a percentage of the share's nominal value. MedlinePlus MedlinePlus This means that if the nominal value of the share is Rs 10, a dividend of 50% would mean a dividend of Rs 5 per share. MedlinePlus MedlinePlus But you may not have paid Rs 10 (face value) for action. MedlinePlus MedlinePlus Let's say you paid Rs 100 (the market value at the time). But only get 5 rupees as its dividend for each share held. MedlinePlus MedlinePlus That, in percentage terms, means that you have only 5% percent as its dividend 50% and the company announced. MedlinePlus MedlinePlus Let's say you paid Rs 9 (the market value at the time). You will still get 5 rupees per share as a dividend. That means that, in percentage terms, have 55.55% and dividend yield and not the 50% the company announced. MedlinePlus MedlinePlus It all depends on the amount you paid for the shares. MedlinePlus MedlinePlus There's money in possession and sale of MedlinePlus MedlinePlus When you buy shares of a company, invest in your business. As the company expands and grows and increase profits, increase its value. MedlinePlus MedlinePlus This, in turn, raises the value of the action. So when you sell, you will receive a premium above (most of) what you paid. MedlinePlus MedlinePlus Not as easy as it seems. Price action is always moving. It could either appreciate (increase in value) or depreciate (decrease in value) to the price at which you bought it. MedlinePlus MedlinePlus If you buy a stock for Rs 10 and sell it for 20 rupees after a year, his statement that the stock is Rs 10, or 100%. MedlinePlus MedlinePlus Or if you buy a stock for Rs 10 and sell it for Rs 9, lost Re 1, or loss is 10%. MedlinePlus MedlinePlus You have to look both MedlinePlus MedlinePlus If you buy a stock for Rs 10 and sell it for 20 rupees after a year, his statement that the stock is Rs 10 or 100%. MedlinePlus MedlinePlus Now add 5 rupees per share as a dividend received. MedlinePlus MedlinePlus Your total return will be Rs 15 (Rs 10 + Rs 5) or 150% (Rs 15 / for 10 rupees x 100). MedlinePlus MedlinePlus If you buy a stock for Rs 10 and sell it for Rs 9 after a year, you lose MedlinePlus Re 1 per share. MedlinePlus However, would have got Rs 5 dividend. So you would net Rs 4, earnings of the company. MedlinePlus MedlinePlus In percentage terms, the yield is 40% (4 Rs / Rs 10 x 100). MedlinePlus MedlinePlus The tax factor MedlinePlus MedlinePlus No tax on dividends. MedlinePlus MedlinePlus When selling an asset you own (house, land, shares, mutual fund units, gold, debentures, bonds), and make a profit from the sale, which is known as a capital gain. MedlinePlus MedlinePlus If you sell your shares after a year, the profit you gain is known as long-term capital. No tax on capital gains in the long term. MedlinePlus MedlinePlus If you sell to a year of purchase, is known as a capital gain in the short term and taxed at 10%.

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