Introduction: Tiny Pieces of Big Companies
Have you ever bought a piece of Apple? No, not the fruit. The company. When you own stock, that’s exactly what you’ve done: You’ve bought a tiny slice of a business. This is a simple idea, but with major implications.
What Is a Stock?
A stock is a share of ownership in a company. Own a stock → own part of that company. Growth → You make money when the stock price rises. Dividends → You get paid while you wait.
How Companies Issue Shares
Why would a company give away pieces of itself? To raise money. When a business needs capital (to expand, build, or hire), it can sell shares to the public in what’s called an IPO (Initial Public Offering). Everybody wins (if the business does well).
What Stock Ownership Really Means
When you buy stocks, you buy into a real business. This means: Even if you own just one share of Tesla or Coca-Cola, you're a shareholder - you own part of that company.
Types of Stocks (Quick Glance)
- Common stock: Most people own this. Voting rights + potential dividends.
- Preferred stock: Usually no votes, but gets dividends first.
Don’t worry too much about this for now.
You’ll mostly see common stocks when investing as a beginner.
Quiz
What does owning a stock really mean?
a) You loaned money to a company
b) You own part of that company
c) You bought a product from them
Why do companies issue shares?
a) To give away ownership for free
b) To raise money to grow
c) To sell off parts they don't want
See the answers at the bottom
Summary and Key Takeaways
- A stock = ownership in a company.
- Stocks can make money through growth and dividends.
- Companies sell shares to raise capital.
- As a shareholder, you're not just investing; you're an owner.
1) What does owning a stock really mean?Answers to the Quiz Questions
Answer: b) You own part of that company
2) Why do companies issue shares?
Answer: b) To raise money to grow
Additional resources
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