Shares

Definition

Shares represent ownership units in a company or financial asset. Owning shares entitles the shareholder to a portion of the company's profits and assets.

5 Must Know Facts For Your Next Test

1. Shares can be bought and sold on stock exchanges.
2. There are different types of shares, such as common and preferred shares.
3. Share prices fluctuate based on supply, demand, and company performance.
4. Dividends may be paid to shareholders as a distribution of profits.
5. Owning shares grants voting rights in company decisions for common shareholders.

Review Questions

• What are some key differences between common and preferred shares?
• Why do share prices fluctuate over time?
• How do shareholders benefit from owning shares in a company?

Related terms

Stock Exchange: A marketplace where stocks and other securities are bought and sold.

Dividend: A payment made by a corporation to its shareholders, usually as a distribution of profits.

Portfolio: A collection of investments held by an individual or institution.