Recently, the stock market has become one of the most interesting and main instruments for investing and raising capital by companies and investors. Most companies use the advantages of stock markets to attract public funding for business development. Thus, it is important to discuss how companies and different investors choose to use the stock market today in detail.
In most cases, company leaders and financial specialists decide to use the stock market in order to attract more resources and raise the existing capital. Thus, capital increase can be done through initial public offerings as well as subsequent offerings of shares on the market (Elfenbaum, n.d.). Then, companies can use the funds raised from selling their shares on the stock market in order to finance their current and future projects, expand their business, pay off debt, and pay dividends. In addition, listing shares on the stock market can also increase a company’s visibility and attract new customers and investors.
Investors also use the stock market to develop their strategies, effectively use available financial resources, and distribute risks. According to Elfenbaum (n.d.), today the Internet allows many people to become investors, and they usually purchase stocks, bonds, options, and other securities to attract assets and increase profits. Depending on the strategy and needs, investors can buy short-term and long-term investments, as well as invest in various markets and companies, depending on their value. As a result, the stock market provides companies and investors with many opportunities for development and improvement of their business. In addition, stock markets also help investors make informed decisions and maximize their profits with reference to the analysis of companies’ profitability and future trends.
Reference
Elfenbaum, O. (n.d.). How does the stock market work? [Video]. TED. Web.