|Stock is a type of security that represents ownership in a
company, also called Equity.
Stock represents a claim on a portion of a companies assets
and net income.
If a shareholder owns 1000 shares of a company and the
company has 10,000 shares of stock outstanding... the
shareholder owns 10% of the company (1000/10,000=10%).
Stock ownership is sometimes confused with bond ownership.
Stockholders own the company whereas bond holders are
creditors of the company. Payments to shareholders by the
company are typically paid out as dividends. Payments to
bond holders represent principle and interest on the bonds.
|What is Stock?
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