What is the stock market? Why would you buy stock? What are capital gains and dividends?...

What is the stock market? Why would you buy stock? What are capital gains and dividends? What stocks does your group recommend?

Expert Solution

A stock market is where stocks of listed companies are bought and sold.It is a secondary market.Stock signifies ownership in a firm.The individual who purchases the stock of a company would have an ownership interest in the company.The market capitalization of a company is the value of it's shares multiplied by the number of shares it has issued.Investors buy stock in order to benefit from share price appreciation and also to get dividends if they are paid.In this context capital gains refer to the profit the investors enjoy from the appreciation of the share price.The investors purchase shares and hold them with the intention to profit from their sale when the share price increases in the future.Dividends refer to the portion of the profits (earnings after tax) that the firm distributes to it's shareholders.The dividend payments are subjected to the firm's dividend policy.The stock that would be recommended are Target stock(retail chain) , since it has had an increase in EPS by 86% in the last quarter.Another recommended stock would be NVIDIA(computer hardware manufacturer) , the stock has seen a steady uptick in the past weeks mostly due to the launch of its new line of hardware.

jeff jeffy answered 1 year ago

Why are stock dividends and realized asset capital gains (longer than 1yr) considered Tax Preferenced?

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Why would someone want to buy stock? Why is stock valuable to an investor? What makes...

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Do you think the reduced capital gains and dividends rate is fair? Write a two-page research...

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