What are shares?

What are shares?

Shares represent ownership in a company and are a fundamental unit of stock markets. When a company issues shares, it allows investors to purchase a portion of the business, making them shareholders. Each share corresponds to a fraction of the company's equity, and owning shares entitles investors to a share of the company's profits, often distributed as dividends.

Shares come in two main types: common and preferred. Common shares typically grant voting rights in company decisions and can provide capital gains if the company's stock price increases. Preferred shares usually offer fixed dividends but may not come with voting rights.

The value of shares fluctuates based on various factors, including the company's performance, market conditions, and investor sentiment. Shares can be bought and sold on stock exchanges, enabling investors to gain or lose money depending on market movements. Overall, shares are a key instrument for raising capital and participating in the growth of companies.

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