Types of stock issuance

A-Level: Economics

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There are several different types of stock
Income stocks are issued by companies that are stable. The company will not usually reinvest a large amount of their profits back into the company each year. The profits are instead distributed to the shareholders in the form of a dividend. If you want dividend income and capital appreciation, you should look towards income stocks. But remember that dividends will be taxed. Plus, the dividend could go higher or lower each year.
Growth stocks are issued by companies that are looking to grow and expand. There is usually no, or very little, dividend income from growth stock. Many of the companies are just starting out in the business world and are actively reinvesting their earnings into their companies. Most advisors consider growth stocks a good choice for those looking to make a nice return over a long period fo time. Annual returns usually run around 11% over ten years.
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