ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the company’s assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.

Detailed explanation-2: -Common stock represents ownership in a company, and it gives shareholders the right to certain assets. Investors with common stock tend to have more control over the direction of the business. They may help determine company policies and have a say in who joins the board of directors.

Detailed explanation-3: -Shares are units of equity ownership in a corporation. For some companies, shares exist as a financial asset providing for an equal distribution of any residual profits, if any are declared, in the form of dividends. Shareholders of a stock that pays no dividends do not participate in a distribution of profits.

Detailed explanation-4: -Key Takeaways Common shareholders are granted six rights: voting power, ownership, the right to transfer ownership, dividends, the right to inspect corporate documents, and the right to sue for wrongful acts.