Topic Content:
- Meaning of Stock
- Meaning of Stock Exchange
- Meaning of Share
What is a Stock?
A stock represents a share in the ownership of a company, including a claim on the company’s earnings and assets.
Companies issue stock to attract investors, so as to raise money to allow the company to expand, buy new equipment, hire more staff, launch new products, etc. A person who buys a company’s stock buys an interest in the company with the hope of getting a return on their investment.
The money a company generates, by selling parts of the company or all of the company, to several part-owners, is called stock. As such, stockholders are partial owners of the company. When the value of the business rises or falls, so does the value of the stock.
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