Understanding Stock Ownership
A stock represents a share of ownership in a company. When you buy a stock, you become a partial owner of that business.
Why Companies Issue Stock
Companies sell shares to raise money for growth, research, or paying off debt. In exchange, shareholders gain potential profits through dividends or price appreciation.
Types of Stock
- Common Stock: Voting rights and potential dividends
- Preferred Stock: Fixed dividends but usually no voting rights
Key Takeaway
Owning stock means you have a stake in a company's future success or failure. The stock price moves based on company performance and market sentiment.