would you please clarify the following points :
1. As the underwriter considers everything regarding a company prior to submitting the application to be listed at the share market, how can it claim a premium along with the face value? what are the potential reasons? ( as you said, if the company got higher net asset it can claim a premium, so the question is why the underwriter didn’t take the net assets of that company into consideration before declaring the face value? )
2. is there any rule to set the face value ( as I saw the face value of all companies across different industries ( such as Bank, pharma, heavy industries) got the same face value ( Bdt 10)?
how come it’s possible since the industries are different hence chances are that their net assets, as well as liabilities and risk factors, are different
3. Just before the trading day what if the company got a new project, can it claim higher face value ? ( for example, if a pharma company came with a new medicine or got a contract to supply medicine to any country for which it requires more funds, what the company will do?)
4. What are the reasons for a company that once got its shares traded at higher than face value started trading at below the face value?
5. If the price of shares of a company goes below the face value, is it still wise to buy shares of that company? kindly explain in detail why to buy or not to buy. And for that matter can it be thought that such companies may lose in the long run?
6. what an investor can do (except counting loss & beating his head) both at primary or at the secondary market if any discrepancy/financial irregularities of a company got discovered? ( suppose higher assets were shown, I heard there were many bogus/imaginary( I mean “দ্যা হায় হায় কোম্পানী লিমিটেড “) companies during 2010 got their price traded at a higher value through the company got nothing even to be listed in the SEC.)
7. what will happen when a merger between the two companies takes place? suppose Company A is profit-making hence got bdt 100 as the price of a share at the secondary market buys a losing company B ( say, which got shares traded at bdt 3 ( below the face value) what will happen to the shares of company B & A?
That’s all for now.
Thank you.
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এটা ভিডিও না।এটা অডিও।
Hello Ratan Bhai,
How is it not video?
would you please clarify the following points :
1. As the underwriter considers everything regarding a company prior to submitting the application to be listed at the share market, how can it claim a premium along with the face value? what are the potential reasons? ( as you said, if the company got higher net asset it can claim a premium, so the question is why the underwriter didn’t take the net assets of that company into consideration before declaring the face value? )
2. is there any rule to set the face value ( as I saw the face value of all companies across different industries ( such as Bank, pharma, heavy industries) got the same face value ( Bdt 10)?
how come it’s possible since the industries are different hence chances are that their net assets, as well as liabilities and risk factors, are different
3. Just before the trading day what if the company got a new project, can it claim higher face value ? ( for example, if a pharma company came with a new medicine or got a contract to supply medicine to any country for which it requires more funds, what the company will do?)
4. What are the reasons for a company that once got its shares traded at higher than face value started trading at below the face value?
5. If the price of shares of a company goes below the face value, is it still wise to buy shares of that company? kindly explain in detail why to buy or not to buy. And for that matter can it be thought that such companies may lose in the long run?
6. what an investor can do (except counting loss & beating his head) both at primary or at the secondary market if any discrepancy/financial irregularities of a company got discovered? ( suppose higher assets were shown, I heard there were many bogus/imaginary( I mean “দ্যা হায় হায় কোম্পানী লিমিটেড “) companies during 2010 got their price traded at a higher value through the company got nothing even to be listed in the SEC.)
7. what will happen when a merger between the two companies takes place? suppose Company A is profit-making hence got bdt 100 as the price of a share at the secondary market buys a losing company B ( say, which got shares traded at bdt 3 ( below the face value) what will happen to the shares of company B & A?
That’s all for now.
Thank you.
When a stock/share is in the market in new situation, then why 10 taka shares are sold at 15 t0 20 taka? Please explain.
This is all about demand and supply. If more people want to buy, and fewer people want to sell, the price goes up and vice versa.