• Concept: A share represents ownership in a company. Shareholders may earn a dividend, which is part of the company’s profit distributed to shareholders.
    • Definition: Company’s profit distributed to shareholders annually
    • Key Point: Always calculated on face value, never on market valueKey Terms:
      1. Face Value (Nominal Value)
      • Definition: The original value printed on the share certificate
      • Characteristics: Always remains constant and never changes
      • Usage: Forms the basis for dividend calculations
      1. Market Value
      • Definition: The current trading price of shares in the stock market
      • Characteristics: Changes from time to time based on market conditions
      • Formula:
        • At Premium: Market Value = Face Value + Premium
        • At Discount: Market Value = Face Value – Discount
        • At Par: Market Value = Face Value
      1. Premium and Discount
      • Premium: When market value > face value (shares costly)
      • Discount: When market value < face value (shares cheaper)
      • At Par: When market value = face value
      1. Dividend
    1. Essential Formulas

    Investment Calculations

    Total Investment = Number of Shares × Market Value per Share
    Number of Shares =

    Dividend Calculations

    Annual Dividend Income =

    Dividend per Share =

    Return on Investment

    Rate of Return (Yield) =

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