Adesun Kehinde 
If you ask an average Nigerian about the difference between stocks and shares, they will most likely respond, “ Are they not the same?”
But no, they are not. The words “stocks” and “shares” are always used when it comes to investment and finance. Each word has a different meaning, but many people use one instead of the other in a context.
Think of “stock” as land and shares as plots of land. Just as land represents a broad category of property, stock represents ownership in a company. Plots of land, on the other hand, are specific portions of the land that can be bought, sold, or owned.
Similarly, shares are specific units of ownership in a company that can be bought, sold, or owned.
In the same analogy, stock represents ownership in a company, and shares are the units that measure how much stock an investor owns.
As shares, two distinct shares of a corporation can have equal values. Each share has a nominal value attached to it. A business can have either fully or partially paid-up shares while stocks of a company or group of companies are always paid in full.
When you buy a stock, you can also sell it on your own or the stock market. During your purchase of the stock, they are closely overseen by governments and regulatory bodies to prevent fraud, protect investors, and benefit the larger economy.
When it comes to shareholders’ rights and ownership, it can be watered down when a firm issues new shares in exchange for funds to maintain or expand the business. Additionally, businesses have the option to purchase back stock, which frequently enables investors to recover their original investment plus capital gains from later increases in the value of the stock.
When it comes to employee,Stock options issued by many companies as compensation do not represent ownership, but represent the right to buy ownership at a future time at a specified price.
Employees would benefit greatly if the option were exercised when the market price exceeded the agreed upon price because they would keep the difference (less taxes) if they sold the stock right away. The area of finance known as private equity includes stocks purchased and sold on private marketplaces.
According to Wikipedia, a person who owns a percentage of the stock has ownership of the corporation proportional to their share. The shares form a stock; the stock of a corporation is partitioned into shares, the total of which is stated at the time of business formation. Additional shares may subsequently be authorized by the existing shareholders and issued by the company.
In some jurisdictions, each share of stock has a certain declared par value which is a nominal accounting value used to represent the equity on the balance sheet of the corporation. In other jurisdictions, however, shares of stock may be issued without associated par value.
Shares represent a fraction of ownership in a business. A business may declare different types (or classes) of shares, each having distinctive ownership rules, privileges, or share values. Ownership of shares may be documented by issuance of a stock certificate stock certificate is a legal document that specifies the number of shares owned by the shareholder, and other specifics of the shares, such as the par value, if any, or the class of the shares.
Stocks can be categorized into two main types: common stock and preferred stock. Common stock represents ownership in a company and gives shareholders voting rights. Preferred stock, on the other hand, has a higher claim on assets and earnings but typically does not come with voting rights. Stocks can also be classified as growth stocks, income stocks, value stocks, dividend stocks, and blue-chip stocks, based on their characteristics, growth potential, and dividend payments.
Shares can be classified into various types, including equity shares, preference shares, bonus shares, right shares, and sweat equity shares. Equity shares represent ownership in a company and give shareholders voting rights. Preference shares have a higher claim on assets and earnings but typically do not come with voting rights. Bonus shares are issued free of cost to existing shareholders, while rights shares are issued to existing shareholders at a discounted price. Sweat equity shares are issued to employees or directors for their contribution to the company.
DONATE TO THE NIGERIAN ECONOMY NEWSPAPER
Articles appearing on the INVESTIGATION & FEATURES pages are done with a lot of cost.
Support our efforts for a just, fair, and better society.
Kindly donate to our publishing company: Account Name: Samhapp Integrated Services Ltd
Account No. 1026486429
Bank: UBA
For further inquiries, contact: 07089770888, [email protected]
Thank you, and God bless you!
