Glossary
Share
A share is a security that represents a stake in the equity of a stock corporation. Whoever holds a share is a co-owner of the company and carries entrepreneurial opportunities as well as risks. Shares can be traded on an exchange, and their price fluctuates with supply and demand. Possible returns are dividends and any price gains, neither of which is guaranteed.
At a glance
- A share represents an equity stake and makes the holder a co-owner of the company.
- Returns can arise from dividends and price gains, but are not guaranteed.
- The price fluctuates; if the company becomes insolvent, the value can fall to zero.
Frequently asked questions
A share represents an equity stake; the holder is a co-owner of the company and carries its opportunities and risks. A bond, by contrast, represents a loan; the holder is a creditor with a claim to interest and repayment. The two securities have different risk and return profiles.
No. A dividend is a distribution of profit decided by the company's general meeting. If a company makes no profit or retains it, the dividend can be lower or omitted entirely.
Part of the topic
Saving & Investing
This entry is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.