It is a market place where shares of public companies are bought and sold It is commonplace where the issuers of the shares & subscribers of the shares come together

1. EQUITY MARKET
By:-
eFinanceManagement.com
https://efinancemanagement.com/sources-of-finance/equity-market

2. Content
1. Meaning
2. How it Works?
3. Stock Exchange or Over the Counter
4. Types
5. Participants
6. Procedures
7. Advantages
8. Disadvantages
9. Reference

3. Meaning
• It is a market place where shares of public companies are bought and
sold
• It is commonplace where the issuers of the shares & subscribers of the
shares come together
• This market are a win-win situation for the company & the investors
• It is also termed as stock market or stock exchange.

4. How it Works?
In primary market
• Lots of buyers bid for the stock according to their estimation of the
market value within the price bands
• After analyzing the company allocates the shares according to the timing
of bid and price band
In secondary market
• Listing of companies share in the stock exchange
• Buyers bid for that shares

5. Stock Exchange or Over the Counter
• Stock exchange functions on a centralized system in a systematic manner
whereas, Over-the-Counter (OTC) markets work on a decentralized
system
• In stock exchange no involvement of any third party like dealers, in the
trade whereas, third-parties like brokers and dealers play a very vital role
in this market
• Stock exchange eliminates counterparty risk whereas, there is high
counterparty risk in OTC markets
• Stock exchange is more transparent and regular whereas, OTC market
are less transparent and regular

6. Types
• Primary Market
• Secondary Market

7. Participants
• Companies
• Retail investors and institutional investors
• Financial intermediaries
• Regulatory authority

8. Procedures
• Risk management
• Information dissemination
• Settlement and clearing

9. Advantages
• Creation of wealth
• Access to a cheaper source of finance
• Boosts the Company’s expansion targets
• Platform for making them visible to the world
• Stability and attracts investors
• Liquidity for investors
• Limited liability
• Enjoy voting rights
• Free from interest rate burden

10. Disadvantages
• Volatility is the biggest risk
• Does not give a guaranteed return to the investor
• Equity shareholder gets money on the basis of the residual claim
• Disclosure of a lot of information to general public at large scale

11. Reference
To know more about it, refer to the following article:
Equity Market