Question

Explain the Benefits of Stock Exchange.

Answer 1

The benefits of the Stock Exchange are classified into benefits to the Community, Company, and Investors.

• Benefits to the Community:

1. Economic Development: It increases economic development by ensuring a steady flow of savings for production.
2. Fund Raising Platform: It enables well-managed companies to raise funds by issue of shares.

• Benefits to the Company:

1. Enhances Goodwill or Reputation: Companies whose shares are quoted on a stock exchange enjoy greater goodwill and credit standing.
2. Raises huge funds: Stock exchange helps the companies to raise huge funds by issue of shares and debentures.

• Benefits to Investors:

1. Liquidity: Stock exchange helps to convert his shares into cash quickly.
2. Investor protection: The stock exchange safeguards, investor’s interests by following strict rules and regulations.