What are Stocks? Stocks Explained for Beginners
What are stocks? A stock is just another name for a share of a company. If you own stock in a company, you own a share of that company. Public investors like me and you most likely hold common stock in the companies we own because that is the most accessible form of stock for retail investors on the stock market.
Common stock is a security that represents ownership in a corporation. As a holder of common stock, you own part of the company, so you are entitled to voting rights in key decisions. You get to elect the board of directors and vote on major corporate policies.
Why do stocks exist? Stocks are issued by a company as a way to raise funds from investors by giving the investors a portion of the rights to the company in return. Companies use the funds they raise from investors to grow or maintain the business.
Companies can issue more shares, also known as equity, of their business to investors at any time to raise more funds. They usually do this if they think the stock has a favorable value on the market at the time. The higher the stock price, the more the company can raise from investors when they issue more shares onto the market.
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Sources:
https://en.wikipedia.org/wiki/Special...
https://spacinsider.com/stats/
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DISCLAIMER: This and all of my videos are for entertainment purposes only. My statements are my opinions and should not be accepted as financial advice.
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