Stocks represent fractional ownership in a corporation, where a share signifies a claim on the company's assets and profits. Companies issue stocks to raise capital for growth, offering investors a stake in their success. Stockholders may profit through dividends (a portion of the company's earnings) and capital gains (selling shares for a higher price than initially paid).
Stocks are generally categorized into common and preferred stock. Common stock typically grants voting rights, allowing shareholders to participate in corporate decisions, while preferred stock usually does not have voting rights but may offer fixed dividend payments. Stocks can also be classified based on market capitalization (large-cap, mid-cap, small-cap) reflecting the company's size and potential risk/return. The price of a stock is subject to market volatility and can be influenced by factors such as company performance, economic trends, and investor sentiment. Stocks are bought and sold on stock exchanges. The price of a single stock depends on the share price. Share prices can range from a few dollars to thousands of dollars.
