What is a stock or share?

A stock or share represents ownership a company. Stock is also called equity or equity security. Owning shares in a company gives a say on how the company is run.

For example, shareholders vote to choose the people who sit on a company’s board of directors.

The board of directors oversees the management team involved in the day-to-day running of the company, typically led by a chief executive officer or managing director.

Shareholders receive a share of the company’s profit through dividends as a reward for putting their money in the business.

Dividends can be paid quarterly or annually. The other reward for shareholders comes in the form of capital gain.