the introduction of stocks
Stock is the portion of owning the company. However one stock repesents the
small percentage of owning the company. The person who buy and hold the
stocks he/she has a right of owning the given company.
Stock in other word is called share.
And the percentage of your share ownership in a given company is called stake.
EXAMPLE; The company have one milion share (10,000,00) and an investor
possess one hundred thousand (10,000,0) of total share. This investor actually
own ten percentage (10%) of the company.
Remember that; the stocks is just assets like other assets such as car, house, land
and etc. so if you possess it you can convert to money any time you want.
CATEGORIES OF SHARES.
There are different category of shares and every category has different in terms of
power of voting, distribution of profits when the company go bankruptcy. When
the company went bankruptcy the certain shareholders of some kind of shares
will get first priority to be paid.
(i)ORDINARY SHARES
These are the shares that have most power in the company. A shareholders of
this kind of shares will be involve directly to the company decision like
investments.
The shareholders who hold this kind of shares, the more company increase value
its more its shares increased in value. Also the more company earn more profits is
more the shareholders earn profits.
When the company go bankruptcy, the shareholders of this kind of shares will