Term:SHARE

A part-ownership of a company. The ownership of companies is divided into individual shares which, if the company is listed on the JSE, can be bought and sold by members of the public through a stockbroker. Companies issue and sell shares to raise the capital they need to start or build their businesses. This is done in the “primary market”. Thereafter, the shares can be bought and sold between members of the public in the “secondary market”. There are many different types of shares which are explained in detail in module 4 – like preference shares, N-shares, non-voting shares, and so on – but the most common and interesting type are “ordinary” or “equity” shares – because they participate in the risks and the returns of the business. Companies can issue new shares, consolidate their shares, split their shares and use their shares to buy other companies. If you own shares in a company then you are entitled to receive your share of whatever dividends the directors declare. Some important statistics on companies are given “per share” such as the net asset value per share (NAV) or the earnings per share (EPS), so it is important to know how many shares a company has in issue on average during the year at the end of its financial year. Many types of changes can be made to the number of shares in issue during the financial year.

Disclaimer - All information and data contained within the PDSnet Glossary terms is for informational and educational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet glossary terms is based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any glossary term for any reason.« Back to Glossary Index