|4562 - How Stocks and the Stock Market Work||05/06/2005 -
14:07:44| Obviously, stocks and the stock market are important,
but you may find that you know very little about them. What is a
stock? What is a stock market? Why do we need a stock market?
Where does the stock come from to begin with, and why do people
want to buy and sell it? If you have questions like these, then
this article will open your eyes to a whole new world! A Simple
Example: Determining Value Let's say that: $300,000 (income) -
$250,000 (expense) = $50,000 (profit) At the end of the second
year, you bring in $325,000 and your expenses remain the same,
for a net profit of $75,000. At this point, you decide that you
want to sell the business. What is it worth? One way to look at
it is to say that the business is "worth" $500,000. If you close
the restaurant, you can sell the building, the equipment and
everything else and get $500,000. This is a simplification, of
course -- the building probably went up in value, and the
equipment went dow