Shares are units of ownership in a company or financial asset owned by investors who exchange capital in return for these units. Shares can be broadly divided into two categories: equity shares and preference shares. Equity shares are the most common type of shares and represent ownership in the company. They provide voting rights and possible returns through price appreciation and dividends. Preference shares, on the other hand, do not provide voting rights but have a higher claim on the companys assets and earnings than equity shares.
The terms "shares" and "stocks" are often used interchangeably, but they represent a company differently. While "stock" is a more general term used to refer to the financial instruments a company issues, "shares" are the units of ownership in a corporation or financial asset owned by investors who exchange capital in return for these units.
The denominated value of a share is its face value, and the total of the face value of issued shares represents the capital of a company, which may not reflect the market value of those shares. The income received from the ownership of shares is a dividend.
In summary, shares are units of ownership in a company that can be bought and sold on the stock market. They represent a claim on the company's assets and earnings and provide voting rights and possible returns through price appreciation and dividends.
