No doubt that you read every day in the daily news about a
subscription launched by a specific company or an offer for sale of shares in
University eligibility or public shareholding company, for example.
So, what are shares? Why it has its own market and does it deserve
all this attention?
• The stock is an equity to own a part of a
company, entitling the right of management both through its membership in the
General Assembly of the shareholders or by the Board of Directors, also gives
profits of the share according to the contribution in the company if it was
there any profits and bear the losses as shares contribution and has the right
to filter the output of the company upon its completion or resolution.
Historically when colonial powers become wider and dominate some
poor countries, they needed huge funds to develop projects for exploiting the
poor States bounties.
Here the genesis of the idea of shareholders companies that have
too many stocks where many people contribute in the company and they meet
enormous funds to the company to enable it to do business. And then this idea
has expanded and grown until it has a significant impact on the economies of
most countries in the world where on mega projects of industrial, commercial,
and others.
• Is the quantity
of a capital stock company.
• equal securities value
negotiable for exchange commercially.
• shares are an important
sector in the economy.
• shares are individuals ownership rights in public companies
Stock types
• cumulative stock • non-cumulative shares •shares of participation •
convertible stock
• Disposable shares
The difference between the stock and the bond:
1- The share represents part of the company's capital, and the
bond is part of a loan to a company or Government.
2- Shares are changeable.
3- Holder of the bond is lender either shareholder is the owner of
part of the company, so the share gives who hold it the right to interfere in
the company.
4- Bonds have a specified time to plug either the share does not
only can be paid after the liquidation of the company.
5- Bond when the bankruptcy quota distributed, either the share
the holder can take his money after paying debts.