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Importance of equity trading.
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Importance of equity trading. Equity trading, or stock trading, is a fundamental component of the financial markets and offers significant importance to investors, companies, and the broader economy. Here are some key reasons why equity trading is crucial: 1. Capital Formation for Companies Raising Funds: Equity trading provides companies with access to capital by allowing them to issue shares to the public through Initial Public Offerings (IPOs) or subsequent offerings. This capital is used for expansion, innovation, debt reduction, and other business activities. Company Growth: The funds raised through equity markets enable companies to invest in research and development, acquisitions, and infrastructure, driving long-term growth. 2. Investment Opportunities for Individuals Wealth Creation: For individual investors, equity trading offers the potential for substantial returns over time through capital appreciation (increase in stock prices) and dividends (periodic payments from ...
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