Important Points for IC 89 - Management Accounting Exam
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Value of equity share or common stock is considered in various manners-Par value, Book value and Liquidating value.
The Securities and Exchange Board of India controls and regulates the Indian Capital market.
Capital markets may be classified as primary markets and secondary markets: Primary markets: In primary markets, new stock and bond issues are sold to investors through a mechanism known as underwriting. Secondary markets: In the secondary markets, existing stocks or securities are purchased and among investors or traders, usually on a securities exchange or over-the-counter at index price.
Dematerialization refers to the substitution of paper-form securities by book-entry securities.
Role of a Stock Exchange: Promoting Public finance, Promoting Growth of Joint Stock companies, Enabling Book-Building path and process, Providing ready market for purchase and sale of financial assets and instruments, Enabling capital mobility, Facilitating Foreign Funds, Index Compilation and Disclosure, Technical Analysis on various funds, stocks, instruments, markets etc., Fostering Economic Development through structured capital formation process, Ready market, liquidity for securities, evaluation, price stability, capital formation, promoting saving habits, Investor protection, Corporate governance.
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