What Is Share?

If you own a share of a company, you own a part of that company. A share is a unit of ownership that represents how much of the company's capital you have invested in exchange for your share. Companies issue shares to raise money from investors who want to participate in the company's growth and profits.

There are two main types of shares: common shares and preferred shares. Common shares give you voting rights and dividends, which are payments from the company's earnings. Dividends are not guaranteed and depend on the company's performance and decisions. Common shares also have potential for capital appreciation, which means your share price can go up or down depending on the market demand and supply.

Preferred shares do not give you voting rights, but they have priority over common shares when it comes to dividends and liquidation. This means that preferred shareholders get paid first before common shareholders if the company distributes dividends or goes bankrupt. Preferred shares usually have fixed dividends that are paid regularly regardless of the company's performance. Preferred shares also have less risk of losing value than common shares, but they also have less chance of gaining value.

Shares are traded on stock exchanges, where buyers and sellers meet to exchange shares at an agreed price. The price of a share depends on many factors, such as the company's earnings, growth prospects, reputation, industry trends, market sentiment, supply and demand, etc. The price can change quickly and unpredictably due to these factors.

Owning shares can be rewarding but also risky. You can earn income from dividends and capital gains if your share price goes up, but you can also lose money if your share price goes down or if the company fails. You should do your research before investing in any company and understand the risks involved.