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Definition of Stock
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Stock, or shares, represent ownership in a corporation. The shares or stock
are claims on a corporations earnings and assets.
Stock in major public corporations is sold on major stock exchanges like the NYSE
or the NASDAQ in the United States. Many countries have major stock exchanges. Public
companies are subject to many laws and regulations to disclose their assets and
earnings to the public. Failure to do so can result in delisting from the stock
exchange or even criminal charges to the board of directors.
Many people invest in stocks. Buying and selling stocks has become fairly easy
with the advent of internet stock trading.
Stock often gives the holder of shares the right to vote their shares and elect the
board of directors that govern and run the corporation.
There are different types of company stock some of which include common stock, preferred stock,
voting and non-voting, and convertible.
Some stocks are classified as growth stocks. This usually means that the stock's value is
expected to grow, but the stock does not pay a dividend. Dividend stocks on the other hand, may
not be expected to grow in value as quickly, but they often pay a dividend based on the
quarter's profits.
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