CHAPTER 1

The Purpose of Investor Relations

Financial markets serve an essential purpose in advanced economies. Like markets of every type, financial markets are mechanisms that facilitate mutual satisfaction through exchange. Behind exchange is the principle of specialization (or “division of labor”), the principle behind all economic growth. Economic growth thus relies on specialization, which in turn relies on the existence of a mechanism of exchange which is easily accessible and that market participants regard as fair, secure, and efficient.

This book will examine one particular financial market: the market for equities, or shares, of listed companies. Equity markets give access to almost limitless amounts of capital, allowing companies ...

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