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Stocks

Stocks, in the financial context, represent a form of participation or ownership in a company. When a company decides to finance itself by issuing a stock, it is offering the public the chance to buy a share in the company. 

Shares represent a fraction of a company’s share capital, so the holder:

  • Has the right to participate in company decisions
  • Benefits directly from the company’s profits through the distribution of proportional dividends and through the appreciation of shares
  • Shares the financial risk of the company. If the company suffers losses, the value of the shares may decrease

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