Business, Legal & Accounting Glossary
Share is a type of security that stands for possession in a corporation. The term acts a claim on that specific corporation’s profits and assets. Ownership in a corporation is calculated by the number of shares that an individual owns in that specific company. For example, if a corporation has a total of 500 shares and an individual owns 25 shares, it is deemed that the person owns 5% of the corporation. Shares are also known in common usage as stocks or equity.
Shares are classified into two types: preferred and common. Common shares give holders of shares the right to receive monetary dividends and also the right to vote during shareholders’ meetings. Preferred stocks enable the holders to a greater claim on earnings and assets as compared to common shares. This type of share or equity generally does not provide the holder of security with voting rights.
Corporate stock is a financial instrument that denotes an ownership position in a specific company. This stock signifies a claim on its proportional equity in the company’s profits and assets. The principal characteristic of corporate stock is that earnings of stockholders are secondary to the claim that the company’s debtors have on its earnings and assets. Corporate stock is also known as equity securities.
It denotes the artificial existence of an asset that is the compound of other assets. An example of an artificial stock is the combination of a long put<put option and a short call option (synthetic short stock) or a long call option and a short put option (synthetic long stock).
Unfortunately Share prices continued their downward trend.
The share price will likely be determined by the bidding activities of institutional investors.
Speculation centred around a likely bid price of 410p a share.
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This glossary post was last updated: 29th March, 2020