Basic Stock Exchange

A Share is a unit of ownership interest in a company. When you buy or receive shares in a company, you become a part owner of that company. This is also known as having equity in that company. The more shares you have in relation to the total number of shares issued by the company, the more of the company you own. For example, if a company has issued 10, 000 shares and you own 100 of those shares, then you are in a 1.0% owner. If another person owns1,000 shares, then the person is a 10.0% owner. People who own shares in a company are referred to collectively as “shareholders” or “stockholders”. A company may also be authorized to issue more than one class of common stock or shares, some of which may not have voting rights.
A dividend is a proportionate distribution of earnings (profits) of a company to its shareholders. With common (ordinary) shares or stocks, the rate of the dividend varies with the company’s performance and with the amount of cash on hand. With preferred stocks or shares, the rate is fixed.
The Board of Directors of the company decides the amount of the dividends to be paid out. They may also decide to hold back some or all of the profits to expand the company’s operations. Dividends can be paid quarterly, half yearly or once per year