What is stock market and share market and How do they work?

Ownership of one or more companies is called stocks. If you buy some part of shares or a share in one or more companies and can be a part-owner of that company.

For example, if a company has 2,000 shares of stock outstanding. And one person owns 200 shares. That person would own and have a claim to 20% of the company’s assets and earnings.

The stock is the larger form of the share. “stocks” is the more general term and used to describe a slice of ownership of one or more companies.

If, a person said he purchased 50 stocks. It means he would refer to 50 different companies from which he bought shares.

However, there are two types of stocks

1.Common Stock: 

Common stocks are shares of ownership of a corporation. They allow you to own a portion of the company without taking possession.

2.Preferred Stock: 

Preferred stocks refer to the dividends paid by the corporation. Each year, the holders of the preferred stock are to receive their dividends before the common stockholders are to receive any dividend.

Most finance career paths will be directly involved with stocks either as an adviser, an issuer, or a buyer.

What is the share market?

Ownership of a particular company called shares. Whenever a company issues stock, each of the units of a stock is considered as a share. Therefore, one share of stock is equal to one unit of ownership in a company.

Shares are a smaller unit of stocks. For example, if a person says he owns shares then some people would ask shares of which company? And what sort of investment? Similarly, an investor can tell his broker to buy him 50 shares of a particular company.

However, we have two types of shares:

Equity shares:

Equity shares are a main source of finance for any company giving investors the right to vote, share profits, and claim on assets. They allow equity share types to share capital, Issued share capital, Subscribed share capital, Paid-up capital, Rights shares, Bonus shares, and Sweat equity shares.

Preference shares:

Preference shares represent ownership of a corporation. A claim on its assets and earnings. Preference share types are Callable shares, Convertible shares, Cumulative shares, and Participatory shares.

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