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Equtiy Basics
 
What is Share/ Stock/ Equity?

A share is one of a finite number of equal portions in the capital of a company, mutual fund or limited partnership, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends and to a portion of the value of the company in case of liquidation. Dividends are not guaranteed. They may be increased if the company performs well, but they may also be reduced or eliminated if the company performs poorly.

So when you purchase shares, you become part owner of a company. As an owner, you are usually entitled to voting rights on the board of directors and corporate policy.

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