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What is stock? bond? investment?


I am pre-studying about essentials of corporate finance. It is saying that stockholders elect directors and directors elect managers. Financial managers should increase the value of the stock.

What's the meaning of stock price?
could you guys portray some simple examples of how stock price related to investment? How stock selling and buying works and what it got to do with bond..

please make me clear..I will appreciate any illustrations of yours for me to relate with my thoughts. Thanks.

stock is an ownership interest. lets say there are 100 shares so 1 share is equal to 1% ownership in the company. ppl will pay more or less for that 1% ownership depending upon the market, and whatever the current buy/sell price is is the stock price.

A bond is a promise to repay a debt with interest. It is not an ownership interest in the company.

an investment is paying money for something of value. buying either stock or bonds is an investment. If you buy microsoft it is a good investment, if you buy dog poop it is a bad investment.

When you own a stock, you own a portion of that company. To designate how much of the company is owned by a signle person, they come up with 'shares'. So a person who has 50 shares of a stock owns more of a company than a person with 1 share does. The stock price is a combination of 2 factors: the first being how much the company is worth, and the second being speculation. So if I have a company worth $50, and there are 50 shares of stock, they should be $1 each. However, if someone thinks that in the future my company will be worth $100, they probably wouldn't sell their shares for $1, so anyone wanting to buy will have to make a higher offer, thus causing the stocks price to raise without the value of the company changing. When you see a stock 'quote' it represents what the last price that shares were exchanged at(bought and sold at).

Edit: Also the weight your vote has in electing directors depends on how many shares you have. Like the previous poster said, a bond is nothing more than a promise to repay a debt. Basically you are lending a company money, and they pay it back with interest. This is similar to you going to a bank for a loan. An investment is anything you buy that you expect to gain from.

dont know exactly you mean by the "meaning of a stock price",which is an equity a public company that trades on a listed exchange(ie,NYSE).I may be able to offer some insight into what factors affecting securities prices,which could be summarized into two categories.
1,Fundamental Analysis
2. Technical Analysis.

How stock selling and buying works(trading).
Publicly owned equities(stocks) are bought and sold on or through the facilities of recognized stock exchanges(NYSE,NASDAQ).
an example.
all trades involve a buyer and a seller.the buyer wishes to acquire 100 shares of company xyz. A seller wishes to sell 100 shares of company xyz.
Both buyer and seller phone an Investment Advisor and get an update price quote.The Investment Advisor learn through the communication links with the exchange trading floor that xyz company is currently 10 dollars bid(buyer) and 11 dollars ask(seller).The prospective buyer thus knows the lowest price at which anyone is currently will to sell(11 dollars).The seller knows the highest price anyone is willing to buy(10 dollars).A sale is possible if the buyer is willing to a pay the sellers price,or if the seller is willing to accept the buyers price.The transaction is completed when a floor(exchange) contract (ticket) is confirmed.
Bonds..i dont know exactly what you mean..but a bond is used when a government/corporation requires funds to finance day to day operations.obviously, more details but that is a bond.

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  Business Investment   Business financing   Business Invest   Business Debt   Bond Investment   Angel Funds   Alternative Investment
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