Share

A company's ownership is divided into many equal units called shares. If a company has 10 million shares and you own 100,000, you own 1% of the company.

Shareholders can earn money through dividends, which are payments from the company's profits, and through capital gains if the share price rises. Most ordinary shares also come with voting rights, allowing shareholders to vote on matters such as electing directors.

Shares of public companies are traded on stock exchanges, where their prices change constantly as buyers and sellers react to news, company results and broader market conditions. Shares in private companies are not traded publicly and are harder to buy or sell.

Owning shares carries risk. Share prices can fall, dividends can be cut, and if a company fails, shareholders are paid last, after all lenders and creditors. In return for this risk, shares have historically offered higher long-term returns than safer investments such as bonds or cash.