The Concept of Capital Markets Essay

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The concept of capital markets refers to a platform that deals with the exchange of excess funds that investors are able and willing to employ in different businesses that need financial support to engage in various productive projects. It encompasses two main types of securities that are debt and equity (Flores et al., 2019). The market is segmented into primary, where the given company provides the securities to obtain capital, and secondary market, where investors transact directly with the security holders without involving the company. Some of the products traded include derivatives, foreign exchange, commodities, equity, and debt securities. On the other hand, preferred stock financing is the use of a different type of stock to acquire the finance to operate the business activities.

New York Stock Exchange (NYSE) and Nasdaq are renowned stock markets in the US and across the globe. NYSE is more of an auction market system that uses specialists, while the Nasdaq is a dealer market consisting of various competing market markers. Both NYSE and Nasdaq require at least 450 round lot holders. Similarly, the minimum amount of public shares required for each company to have is about 1,250,000 (Nasdaq, 2022). The market valuation criteria for NYSE and Nasdaq is that the company should have over 400 shareholders, and the price per share must not be below $4 (Nasdaq, 2022). Moreover, the required market value of publicly held shares should be $40 million. The earning test for NYSE and Nasdaq is $10 million and $11 million for the last three years (“NYSE | Listed Company Resources”, 2022). The listing fee for NYSE is between $150,000 and $295,000, whereas; the Nasdaq minimum fee is $45,000, and the maximum is $155,000.

Based on the data provided on the quote chart about 3M’s, the 52-week high and low are $203.21 and $128.19, respectively. The price percent change is -1.46% and the volume is 1,155,568 having a -1.12% variation (“3M – Stock Information – Stock Quote & Chart”, 2022). According to the analysis, 3M’s stock performance has reduced slightly over the given time. The P/E ratio has decreased because the reduction in prices made the stock undervalued, thus attracting more investors.

References

Nyse.com. (2022). Web.

Investors.3m.com. (2022). Web.

(2022). Web.

Flores, E., Fasan, M., Mendes‐da‐Silva, W., & Sampaio, J. O. (2019). Integrated reporting and capital markets in an international setting: The role of financial analysts. Business Strategy and the Environment, 28(7), 1465-1480. Web.

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