Share

Shares or Stock are representatives of the ownership stake of the company. It is a financial asset called equity, in which the shareholders of the company will receive returns in two main forms: dividends and capital gains (when selling shares).

The Company’s shares can be divided into 2 types: Common shares and preferred shares. which will have different privileges, whereby Common shareholders will have the right to vote at the shareholders’ meeting to change or formulate the company’s policies, which the preferred shareholders will not have any right to vote But when a company goes bankrupt and requires reimbursement to shareholders, preferred shareholders have the opportunity to get their investment back before common shareholders.

Both common and preferred shareholders are entitled to receive dividends. But preferred shareholders are guaranteed to receive dividends before common shareholders in case the company’s profits are insufficient to pay dividends back to all shareholders.