Shares represent ownership in a company, giving investors both profits and risks. Companies issue shares to raise capital.
Shares represent ownership in a company. Shareholders are investors and own a portion of the company. They benefit from profits but also bear the risk of losses.
Different Types of Shares
In the stock market, shares are classified into two categories. These include -
• Equity Shares
• Preference shares
Why are shares issued by a company?
Companies issue shares to raise cash for operations and expansion, giving investors ownership and voting rights in the business. This method of raising funds through stock shares is known as "equity financing.".
