Share (Shares or Stock) is a term that refers to the type of securities. Share is an equity security, which confirms a capital share in the joint stock company of its holder - a shareholder. Capital share in the joint stock company is given by a nominal value of the share (the value at which the share was purchased). However, shareholders are more interested in the market value, i.e. the actual value of the share (share rate). The rate changes in time and depends on the financial situation of the company.
Share’s market value is based on market sentiment, the situation on the stock exchange and on real financial situation and company valuation. Holding the share can also result in the payment of dividends. Payment of dividends and share market value are closely related. Change in market value, i.e. the share rate, is a key influence on the proportion of shareholder’s assets.
Types of shares according to rights of holders:
- Common shares are shares to which aren’t attached any special rights
- Preferred shares are shares that allow the preferred payment of dividends and share in liquidation before the shareholders holding common shares
- Employee shares (or options) are certificates issued by companies to their employees as a form of reward and motivation tool. They can be used within a set period of time to purchase shares of the company at a set price regardless of the share price on the open market.
Shares according to the form of their existence:
- Certificated shares are shares existing as a de facto security that the shareholder keeps
- Booked shares are shares registered in the register of securities
Shares according to the form of ownership and transfer options:
Registered shares are shares tied to a particular shareholder Bearer shares are shares that are not tied to particular shareholder. The rights performance associated with these shares may make the person who is their owner. Their transfer is possible by simply passing the security