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What is a Share?

A share is simply a divided-up unit of the value of a company. If a company is worth Rs.100 million, and there are 50 million shares in issue, then each share is worth Rs.2 (usually listed as 200p in the money pages.) As the overall value of the company fluctuates so does the share price. 


In other Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market. A stock is represented by a stock certificate. This is a paper that is proof of your ownership. In today's computer age, you won't actually get to see this document because your broker keeps these records electronically, which is also known as holding shares. 

Shareholder Facts

1. Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
2. You can generate returns through dividends in the long run Investments in stocks.

What is meant by Face Value of a share:

Face Value of the share is the nominal or stated amount (in Rs.) assigned to a security by the issuer. For shares, it is the original cost of the stock shown on the certificate; for bonds, it is the amount paid to the holder at maturity. For an equity share, the face value is usually a very small amount (Rs. 5, Rs. 10) and does not have much bearing on the price of the share, which may quote higher in the market, at Rs. 100 or Rs. 1000 or any other price. For a debt security, face value is the amount repaid to the investor when the bond matures (usually, Government securities and corporate bonds have a face value of Rs. 100). The price at which the security trades depends on the fluctuations in the interest rates in the economy.

Issue of shares at discount or Premium

Issue of shares at discount meant issue on price below the face value.
Issue of shares at premium meant issue on price above the face value.

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