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Accounting Research Paper

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First Time Investments 1

First Time Investments:

An Elementary Explanation for New Shareholders

Jill Van Hill

Accounting 302

Professor Wallace

10/03/2014

First Time Investments 2

First Time Investments:

An Elementary Explanation for New Shareholders

An investor can be from a number of different sources. On one hand, they could be a

major corporation that not only sells its own stock, but also owns shares in other companies. On

the other hand, they could be a first time investor looking to exercise some extra money and see

if they can turn a profit. Either way, the stock market can be a confusing and intimidating place.

Every investor needs to have a basic understand of where the shares of stock are coming from

and what exactly is involved. To help with this elementary understanding, we will observe and

address few questions.

1. What are the distinguishing characteristics between different shares of stock?

2. What are the benefits to the investor?

3. What is par value and why is it important?

What Are The Distinguishing Characteristics

Between Different Shares of Stock

To fully understand and grasp the full concept we need to break it all down into bite

sized, comprehensible pieces and the New Oxford American Dictionary helps to provide these

definitions. In order to become a shareholder in a company an individual needs to purchase

shares of stock. A share is considered to be a portion of a larger amount that is divided among a

number of other shareholders that also contribute to the company. Stock is the capital that is

being raised by a company through issuing the shares to the general public or to other

corporations. The individuals who purchase the shares are now considered the owners of the

First Time Investments 3

company and are entitled to...

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