Fof Final Assigment

The flow of funds within financial markets is stimulated by the money, bond and mortgage markets. A money market is the trading of highly liquid financial instruments with a duration of one year or less and includes the trading of Treasury bills. Furthermore, bonds are long term investments, with a duration greater than 1 year and are issued by corporations and the U.S. government. In addition, the mortgage market creates loans to finance the real estate market. Once mortgages are issued on a property, banking institutions securitize the mortgages and sell them on the secondary market (CSU Global, 2016). Due to the scale of these three markets they have an extensive impact on the monetary supply and economy.

To put it simply, in financial terms, to maximize shareholders wealth means to maximize purchasing power. Throughout the years, we have learned that markets are most efficient when the company is able to maximize at the current share price. Every company’s main goal should be to strive to maximize its value to every single one of their shareholders. Common stock represents the value of the market price, and it also gives the shareholder an idea of the different investment, financing, and dividend decisions made by that particular firm.

* The value of the stock may see an upward trend thus increasing the initial investor’s financial wealth

As a matter of first importance, lets begin off by expressing what the money market is comprised of and this is comprised of cash and bond, at the end of the day the conduct of central banks and private parts monetary establishments. There are both positives and negatives for individuals holding their cash in both of the two. For instance, in the private segment you put in your cash into securities in this way there is a plausibility of profiting through premium however then again, this is seen as a danger if the rate falls and you’ll a percentage loose your money. Additionally, because of in the event that you hold cash in a settled rate

Let us try to understand the concept of dividend. When a company earns the profit, it either invests that profit in back in the company for growth or pays back the profits to its shareholders in the form of dividends, so that they get some return from the investments

According to investopedia, dividend is a distribution of amount of company’s earnings that have been decided by board of directors, to their shareholders. Dividends are cash payments that corporations make to their common stockholders (Gallagher and Andrew, 2013). Dividend per share can be calculated as follow:

Dividend is that portion of net profits which is distributed among the shareholders. Every company would have their own dividend policy. Some may have a kind of policy where they have a fixed amount of dividend for a number of years, some have a constant payout ratio, other can have a constant dividend per share , some may give no divided at all etc. However some theorist believe that dividend policy is irrelevant other believe relevant.

Once a company is formed and incorporated it has perpetual existence meaning it has its own legal personality. It can enter in to contracts, have its own obligations, it can purchase or rent property, it can employ people, etc. All these are the responsibility of the company, not the directors or others involved in the company, however the director have responsibilities to act in the best interest in the company and its shareholders. If some or all the shareholders of the company die it has no effect on the company. A company’s life is ended by winding up/liqudation. Alternatively a company which fails to file return annually may be removed by not filing annual returns.

One of the company's financial policy is the payment of dividends to investors who have invested their funds in the form of company stock. Dividend itself is a profit corporation that is set aside, revealed and given to shareholders based on the decision of the board of directors or the sum of the proportion of company profits which are given to shareholders as remuneration for the contribution of shareholders who invest their money in companies. The aim of the company to pay dividends is debatable. Until now there has been no explanation that can be widely accepted, especially to answer such questions as why the corporation distributes some of its earnings in the form of dividends or why the corporation does not pay the dividends, why investors

From the purchase of shares, investors can earn two types of gains rather having one gain. The stock market tend to rise in value at the same time the individual stocks can be either raised or fallen. In this situation investors can turn their decisions towards buy more shares or sell their shares accordingly and can earn investment

A dividend policy is a company’s way of distributing profits to shareholders. It is a guideline that companies use to make decisions concerning how much earnings will be paid to shareholders. Dividend policy only refers to ordinary shares. Before drafting a dividend policy, management needs to take a number of basics considerations into account, such as factors that influence the dividends policy. There are four factors to be considered, legal, contractual and internal constraints, growth considerations, owner requirements and market considerations. The aim of dividend policy is to satisfy certain purposes such as wealth maximization and securing a source of funds.

In India, people tend to invest their money to secure their future or earn some extra income. Some invest their money in gold or diamonds, while some prefer the options like mutual funds. At present, the share market is a great option to invest your money in. If you have enough patience and capability of taking the right decision without getting influence or panic, this is the perfect way for you to earn more.

Two of the most commonly used components of the financial markets are money markets and capital markets. The biggest distinguishing factor between these two markets is on the basis to maturity of the securities traded in each market (Mishkin, 2016). Money markets deal with short term debt instruments- less than one year and capital markets deal with debt instruments – typically greater than one year and longer, as well as equity instruments (Mishkin, 2016).

Property investments include: Residential property such as houses and units, Commercial property such as individual offices or office blocks, Retail premises such as

The second set of tools which involve the provision of liquidity directly to borrowers and investors in key credit markets. In this the government has introduced advantages to buy profoundly evaluated business paper at a term of three months and to give reinforcement liquidity for money market mutual funds (Federal Reserve, 2009).Also, the Federal Reserve and