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Share definition
A share is a unit of ownership in a company. Owning one makes you a part-owner, or shareholder, with a claim on a slice of the company's assets and profits.
Companies issue shares to raise capital, and each share usually carries a set of rights: a vote on certain company decisions, and a claim on dividends when the board pays them. The combined market value of all a company's shares rises and falls with its share price.
A share is not the same as a bond. A share is equity, so it represents ownership, has no maturity date, and returns value through dividends and a rising share price. A bond is debt: you lend money to the issuer, who owes you fixed interest and the return of your principal at maturity, but you own no part of the company. Shares can be traded outright or through a stock CFD, which tracks the price without conferring ownership.
Share Example
You buy 200 shares in a company at USD 25 each. You pay:
200 √ó USD 25 = USD 5,000
You now own 200 shares. If the company has 50 million shares in total, your stake is:
200 √∑ 50 million = 0.0004%
Small, but it still carries a proportional claim on dividends and a vote at the company's meetings.
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