Question

Explain the importance of a stock exchange from the view point of entrepreneurs/companies.

Answer 1

Answer:

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1. Recognition: The market values of companies’ shares are published in important dailies. This enhances the reputation of good companies/ entrepreneurs. 

2. Wide market: The securities of some companies are listed in some stock exchanges. The market for the securities of such companies is considerably widened. Thus, larger amounts of capital may be raised from different types of investors. 

3. Higher share values: People have a tendency to buy shares that have some premium value. Demand of such shares increases.

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Answer 2

The stock market serves two very important purposes. The first is to provide capital. It is a measure of a company's liquidity and its ability to meet short-term obligations as well as fund operations of the business. The ideal position is to to companies that they can use to fund and expand their businesses.