Answer / akshay dhondu more.

1.A market in which individuals and institutions trade
financial securities. Organizations/institutions in the
public and private sectors also often sell securities on
the capital markets in order to raise funds. Thus, this
type of market is composed of both the primary and
secondary markets.Both the stock and bond markets are parts
of the capital markets. For example, when a company
conducts an IPO, it is tapping the investing public for
capital and is therefore using the capital markets. This is
also true when a country's government issues Treasury bonds
in the bond market to fund its spending initiatives.Capital
Market is the market from where individuals, companies and
govt. can long term financing by engaging in buying and
selling of securities. Capital Market comprises of Primary
Market and Secondary Market. In primary market, newly
issued stocks and bonds are exchanged and in the secondary
market trade of existing stocks and bonds take place.

Capital Market can be divided into Bond Market and Stock
Market. In Bond Market, buying and selling of newly issued
and existing bonds takes place. In Stock Market, exchange
of newly issued and existing shares or stocks is carried
out.

The participants of capital market are mainly those who
have a surplus of funds and those who have a deficit of
funds. The persons having surplus money want to invest in
capital market in hope of getting high returns on their
investment. On the other hand, people with fund deficit try
to get financing from the capital market by selling stocks
and bonds. These two kinds of activities keep the capital
market going.

Capital Market is characterized as the provider of long-
term financing. The instruments used for this long-term
financing are equity instruments, insurance instruments,
derivative instruments and especially bonds.
Following are the typs of capital market:-
A :- Initial Public Offering

Companies can raise large amount of long term capital from
capital market by issuing Initial Public Offering or IPO. A
company gets “floated” in the stock market through an IPO.
Whenever a company get financing through IPO, it has to
lose some control over the company, proportional to the
amount of shares that is sold to the investors. But the
company interested in issuing IPO has to satisfy the entry
standards to get a full listing in the stock market.
Earlier these entry standards were quite stringent, but
nowadays initiatives are taken by the stock markets to make
the entry a bit easy for the new, technology based
innovative companies. New stock markets are also created
with simplified entry requirement for new innovative
companies. These new stock markets have all the
characteristics of a public stock market and these provide
the new companies their much required access to capital.

B:- Venture Capital in the Capital Market

Venture capital is the fund that is raised through capital
market by specialized agents. This Venture Capital is one
of the main sources of funding for the new business
companies. Venture capitalists buy bonds and shares issued
by a new company. They are not interested in getting
immediate dividends from the company in which they have
invested. They want the companies to expand their scale
which will in turn increase the value of their invested
capital. So, the Venture Capitalists are generally
interested in promoting new companies with high growth
prospect.

Capital Market is now becoming more global and the
competition among the institutions are rising in this era
of “institutionalized” markets. A larger share of credit
now flows through the channels of capital market. Financing
through capital market involves a much easier process
compared to financing through banks. Deregulation, growing
competition, advanced technology and fluctuating interest
rates has resulted in increased efficiency of capital
markets. Capital Markets now has to offer more flexible
ranges of financial instruments for borrowing and raising
funds which help the borrowers and investors to manage
risks associated with lending and investment, in a better
way.

2. Meaning of Share:- In finance a share is a unit of
account for various financial instruments including stocks,
mutual funds, limited partnerships, and REIT's. In British
English, the usage of the word share alone to refer solely
to stocks is so common that it almost replaces the word
stock itself.

In simple Words, a share or stock is a document issued by a
company, which entitles its holder to be one of the owners
of the company. A share is issued by a company or can be
purchased from the stock market.

By owning a share you can earn a portion and selling shares
you get capital gain. So, your return is the dividend plus
the capital gain. However, you also run a risk of making a
capital loss if you have sold the share at a price below
your buying price.

A company's stock price reflects what investors think about
the stock, not necessarily what the company is "worth." For
example, companies that are growing quickly often trade at
a higher price than the company might currently be "worth."
Stock prices are also affected by all forms of company and
market news. Publicly traded companies are required to
report quarterly on their financial status and earnings.
Market forces and general investor opinions can also affect
share price.Part of the ownership of a company. A person
who buys a portion of a company's capital becomes a
shareholder in that company's assets and as such receives a
share of the company's profits in the form of an annual
dividend. Lucky or astute investors may also reap a capital
gain as the market value of the shares increases. Shares
come in different forms:
ordinary shares No special rights (except voting rights)
are attached to these, and the bulk of a company's capital
is issued this way.

preference shares These have priority over ordinary shares
in entitlements to dividend payments and in claims to the
assets of a company if it is wound up.

cumulative preferences shares The holder of these shares is
entitled to a fixed annual dividend, and if this is not
produced one year, the amount due is carried forward and
paid the following year. This entitlement ranks ahead of
ordinary shareholders' dividends. (Sometimes these are
redeemable, in which case they are similar to loan
securities.)

participating preference shares The holder receives a
stated dividend each year and is entitled to share in any
profits remaining after ordinary shareholders have had
their bite.

3. Meaning Of Dividend:- This was one of the main questions
for the Court in Memec plc v Inland Revenue Commissioners
[1996] STC 1336 which is a useful reminder to practitioners
that the approach adopted by the Court in interpreting tax
treaties can differ markedly from the more familiar
approach to the construction of domestic tax statutes. For
Memec to succeed in its claim to double tax relief (“DTR”)
it had to show that “dividend” had the same meaning for
both treaty and domestic purposes, but the Court (Chancery
Division, Robert Walker J) applied different principles of
interpretation in holding that the word did not have
precisely the same meaning for both purposes.
Before plunging in to the decision in Memec, it is useful
to summarise the legal nature and effect of treaties and
the principles surrounding their interpretation.
The Legal Nature And Effect of Treaties
All treaties (including tax treaties) are agreements
between sovereign states and hence obligations of the
states concerned under public international law. Treaties
do not automatically give the private citizen any rights
because they are not part of the domestic law of the United
Kingdom. Frequently, parliament incorporates treaties into
domestic law, giving the citizen the right to rely on them.
Tax treaties become part of domestic law, following the
procedure indicated in Section 788(1) ICTA 1988, by the
issue of an Order in Council containing the text of the
treaty and a declaration that arrangements have been made
with the government concerned “with a view to affording
relief from double taxation….”
Section 788(3) of ICTA goes on to provide that in these
circumstances
“the arrangements shall, notwithstanding anything in any
enactment, have effect in relation to income tax and
corporation tax …”
This wording incorporates the arrangements into domestic
law. Where the arrangements conflict with domestic
legislation, the wording is also sufficient to ensure that
treaty provisions prevail: see Ostime v Australian Mutual
Provident Society (1959) 38TC 492 at 514.

4.Meaning of Mutualfund:- Mutual Funds Definition refers to
the meaning of Mutual Fund, which is a fund, managed by an
investment company with the financial objective of
generating high Rate of Returns. These asset management or
investment management companies collects money from the
investors and invests those money in different Stocks,
Bonds and other financial securities in a diversified
manner. Before investing they carry out thorough research
and detailed analysis on the market conditions and market
trends of stock and bond prices. These things help the fund
mangers to speculate properly in the right direction.

The investors who invest their money in the Mutual fund of
any Investment Management Company, receive an Equity
Position in that particular mutual fund. When after certain
period of time, whether long term or short term, the
investors sell the Shares of the Mutual Fund, they receive
the return according to the market conditions.
The investment companies receive profit by allocating
people's money in different stocks and bonds according to
their Speculation about the Market Trend.

Other than some specific mutual funds which carry certain
Maturity Term, Investors can generally sell the shares of
their mutual funds at any time they want. But, the return
will vary according to market value of the stocks and bonds
in which that particular mutual fund made investment. But,
generally the share holders of mutual fund sell their share
when the prices are up and Capital Gain is sure to happen.

To get more detailed information on Mutual Funds one is
advised to browse through the following links:


Scope of Mutual Funds
History of Mutual Funds
Growth of Mutual Funds
Mutual Funds Investment
Opportunities of Mutual Funds
Challenges Facing Mutual Funds
Mutual Funds Vs Individual Stocks
Average Annual Return
Automatic Investment Plan
Automatic Reinvestment Plan
Assets Under Management
Asset Management Fund
Asset Size
Asset Class
Asset Allocation

how to calculate operating and financial leverages

1 Answers  

---

What Does Suspense Account Mean?

13 Answers   Capital IQ, Talk Delta,

---

Hi..! Frineds plz give a suggesion.I want to join in m.com (i.s.), What is features of this course.

3 Answers  

---

What is the difference between equity shares & preferred shares?

10 Answers   eClerx, JPMorgan Chase, Patni,

---

What is Technical Analysis?

2 Answers   Airtel,

---

---

in which head ESI A/c will be come?

4 Answers  

---

What is ASAP methodology

4 Answers  

---

How does the accounting treatment of a partner's salary differ from that of an employee's salary in a partnership?

5 Answers  

---

This is a managerial finance question on capital structure - My capital expenditure is 40mil, and my forecast retained earnings are 15mil, my targeted capital structure is a debt ration of 40%. What is the amount of dividends and new common stock that the company will issue.

1 Answers  

---

What is Account?

2 Answers   FIC,

---

a company sold an equipment for $8600, but the actual book value of the machine was $8000, pass journal entry

3 Answers   Xerox,

---

Short Answer on _______Appropriation

0 Answers  

---