Shares: A Comprehensive Guide
What is a Share?
A share represents ownership in a company. When you buy shares, you are purchasing a small portion of the company, making you a shareholder. Shares are bought and sold on the stock market, and their value can fluctuate based on the company\\\\'s performance and market conditions.
Types of Shares
- Common Shares:
- Represent ownership in a company with voting rights.
- Dividends are paid at the discretion of the company.
- Higher risk, as returns depend on the company\\\\'s performance.
- Preferred Shares:
- Have a fixed dividend and priority over common shares in case of liquidation.
- No voting rights, but more stable returns.
- Lower risk than common shares, but limited potential for growth.
- Convertible Shares:
- Preferred shares that can be converted into common shares after a certain period.
- Offer flexibility for investors to switch to common shares if the company grows.
- Offer potential for growth and dividends.