how stock market work – what is stock market- share market
In today’s article, we will learn what is stock market and how the stock market works and how to earn millions of rupees from share market.
what is stock market? how stock market work
First, let’s talk about the stock market. Suppose there is a boy who has his own shop and he is making a good profit. It is very easy to learn about the stock market and invest in the stock market. If you open an account with a broker then you do not need any experience.
But now he is thinking of expanding his business ie he wants to expand his business but he does not have money to grow his business so now he decides that he will list his company on Pakistan Stock Exchange.
When June lists his company in his stock market, we will buy shares from him at the rate of Rs. 10 now we Are shareholders. That company is not only June, but we are also part of it.
share market profit, google facebook stock market.
So what will Jhon do with our money he will expand his business with our money and when he will expand his business then when his company will benefit then what is the share of the company that we bought for 10 rupees Going to share feature if it is worth Rs. 20, we will sell this share.
And the share in which you have gained Rs. 10 will be called capital gain. a profit from sell of an investment. Dividend. some of the money paid regularly by a company to its shareholder out of its profit. But June doesn’t necessarily give divide you.
Stock Market Dividend.
For example, large companies do not pay dividends to their shareholders. For example, Facebook and Google say that we do not pay dividends to shareholders because we can make a profit by re-investing in them. And make your shareholders more profitable.
For example, Google’s share is Rs.100 and if google announces a dividend of Rs.5 share on this and then you will get a profit of Rs.5. But if Google does not pay dividends to its shareholders, then it reinvests its profit, so I think it can give more benefits to its shareholders.
This will increase the share price and if it was 100 rupees then it will be 110 rupees and there will be a profit on your share. And so where you were making a profit of five rupees for a hundred rupees, you will have a profit of ten rupees for a hundred rupees. If the company is not paying you dividends then you will have this benefit.
Dividend and Bank interest, stock market.
So first I will tell you what is the difference between the bank interest and stock market division۔ shareholder Every company has a meeting in which it is decided how much dividend to be paid to the shareholders.
When we buy shares of a company, it pays dividends to the company every year. You know the difference between a dividend and a bank that pays us interest. Suppose you have a fixed deposit of Rs. 1 million in a bank for three years.
The bank tells you that it will give you a 6% profit every year.
If the bank fixes 6% with you once, it will have to give you 6% profit for three years. The bank could not change this role for you for 3 years. The law applies to the bank to give you a small profit for keeping money in the bank.
But if any company is listed on the stock exchange, It is not necessary to give the amount of a specific dividend. For example, the share of Toyota company is 12 hundred rupees but it was giving a profit of 19 rupees to its shareholders till 2019.
Due to corona in 2020, this broken company paid a dividend of Rs 30. The law does not apply to companies that pay you a fixed dividend. Some companies are making huge profits but still do not pay dividends like bike and many companies.
There are two ways to earn money in the stock market, one for capital gain and one through dividends. There are two types of tax in the stock market, one is capital gain tax and one is withholding tax.
If you are a filer then your text will be deducted 15% but if you are a nonfiler then your tax will be deducted 30%. If sold then two rupees was your capital and ten rupees gain on it and filer tax three rupees but nonfiler 3% If you hold your share for four years and sell after four years then you No tax will be deducted and you will expand the tax.