Companies of all sizes raise the money they need for investment from shareholders. This investment can help a company launch new products, fund daily operations, or finance expansion and acquisitions. Shareholders provide money to the company as an investment and, in return, receive a stake in the business through shares. The company may pay dividends from its profits to shareholders each year.
WHAT DOES IT MEAN TO BE A SHAREHOLDER?
Shareholders can be individuals or financial institutions that invest in companies on behalf of their clients or themselves. Shareholders are protected from unfair or illegal practices by robust corporate governance laws and regulations. These laws hold directors accountable and provide investors with legal avenues to seek redress if a company acts against shareholders’ interests.
Shareholders are entitled to attend a company’s Annual General Meeting (AGM) and vote on directors’ pay and important decisions about the company’s future.
HOW DO SHARE PRICES WORK?
Individual share prices listed on the stock market can change continuously, depending on how many people are buying and selling each share and what the last buyer was prepared to pay. Share values can increase or decrease, sometimes considerably, within a short period if many investors follow the same course of action.
WHAT RETURN CAN I EXPECT FROM SHARES?
There are two possible forms of return from shares. The first is a dividend, which is part of a company’s profits distributed to shareholders. The total dividend is usually split into two parts, decided at the end of each half-year. The second possible return is growth in the value of the shares themselves. If a company is successful and has strong future prospects, the value of its shares may grow. This is called capital growth. Neither dividend income nor capital growth can be guaranteed.
HOW CAN I BUY SHARES?
At Redmayne Bentley, you can give your instructions by telephone or in person, and they will normally be carried out immediately with the share price confirmed to you. You will be asked to pay by debit card. Our Execution-Only service gives clients access to a designated stockbroker to assist with their dealing requirements.
HOW much will it cost me?
The cost to deal depends on the share price and how many shares you would like to purchase. In addition to commission on the purchase and sale, you’ll also have to pay government Stamp Duty on purchases (usually 0.5% of the total value). For details of our associated transaction charges please see the Execution-Only schedule of charges.
For details on how much it will cost you to deal at your discretion, please use the charges calculator.
It is important to note that dividend distributions are not guaranteed, and companies are not obliged to pay dividends in any form. Dividends are paid at the discretion of the company in which the investor has chosen to invest.
Shares may go up or down in value, which could result in capital loss. It is important to consider that past performance is not an indicator of future results.
Majority shareholders may have sufficient voting power to influence the outcome of resolutions at AGMs, which may result in decisions that differ from the preferences of other shareholders.
HOW CAN I FIND OUT MORE?