ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As an investor in a company, you own a portion of the company (no matter how small that portion is); however, this doesn’t mean that you own property of the company. Let’s go back to B’s Chicken Restaurant and C’s Brewing Company.

Detailed explanation-2: -A: When you buy a stock, you technically become a part owner of a company or business-although generally without the responsibility of the day-to-day running of that business. There are a number of rights and benefits that come with being a shareholder, whether you own one share or thousands.

Detailed explanation-3: -Stocks are an equity investment that represents part ownership in a corporation and entitles you to part of that corporation’s earnings and assets. So, when an investor buys a share of a company’s stock, they are buying ownership in a publicly-traded company.

Detailed explanation-4: -When you buy a company’s stock, you’re purchasing a small piece of that company, called a share. Investors purchase stocks in companies they think will go up in value. If that happens, the company’s stock increases in value as well. The stock can then be sold for a profit.

Detailed explanation-5: -Definition and Examples of Shareholders Because a shareholder owns one or more shares of stock in a company, a shareholder is a partial owner of the company.