What is a share or stock
What is a share or stock, have you ever thought about this before investing in stock market? It may not sound interesting or important but going through basic and understanding what you are doing will always helps you. Investment in equity is a very common thing and easy thing to do as far the process of investment is concerned.
What is a share or stock- The capital stock or stock of a business entity indicates the original capital paid or invested in the business by its founders. It is a security for the creditors of a business because it cannot be withdrawn to the detriment of the creditors. Stock is different from the property and the assets of a business which may fluctuate in quantity and value. Value of stock or share can vary. Stock of a company or business entity consists of shares and each share will have a declared value. This value will change in accordance with the performance and interest of the buyers and sellers in stock market.
There are two types of stocks;
Common stock – Common stock carry voting rights in the company’s decision making process.
Preferred stock – Preferred stock do not carry voting rights but have legal right to receive dividends before dividends are paid to other shareholders.
Convertible preferred stock – Convertible preferred stock have an option of converting these stocks to common stock (fixed numbers) after a prefixed date.
A Shareholder or Stockholder can be business entity or individual holding who holds shares of a stock in a joint stock company.
This information can give you a basic understanding of the common terms which we listen everyday in news channels and elsewhere about stock markets. Investing in a company means investing in its future so make sure that you know the pros and cons of the sector and company in which you are investing. To do short term trading, you need to learn technical analysis. To download your free technical analysis ebook, subscriber and email your mail id at [email protected]
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