Share (finance)

In financial markets, a share is a unit used as mutual funds, limited

partnerships, and real estate investment trusts.[1] Share capital refers
to all of the shares of an enterprise. The owner of shares in the
company is a shareholder (or stockholder) of the corporation.[2] A
share is an indivisible unit of capital, expressing the ownership
relationship between the company and the shareholder. The
denominated value of a share is its face value, and the total of the
face value of issued shares represent the capital of a company,[3]
which may not reflect the market value of those shares.
A share certificate from 1936
The income received from the ownership of shares is a dividend. entitling the holder to shares in
There are different types of shares such as equity shares, preference Greyhound Lines.
shares, deferred shares, redeemable shares, bonus shares, right
shares, and employee stock option plan shares.

Contents
Valuation
Terminology
Tax treatment
Share certificates
See also
References
External links

Valuation
Shares are valued according to the various principles in different markets, but a basic premise is that a share
is worth the price at which a transaction would be likely to occur were the shares to be sold. The liquidity
of markets is a major consideration as to whether a share is able to be sold at any given time. An actual sale
transaction of shares between buyer and seller is usually considered to provide the best prima facie market
indicator as to the "true value" of shares at that particular time.

Terminology
Shares outstanding are those that are authorized by the government, issued by the
company, and held by third parties. The number of shares outstanding times the share price
gives the market capitalization of the company, which if the trading price held constant would
be sufficient to purchase the company.
Treasury shares are authorized, issued, and held by the company itself.
Issued shares is the sum of shares outstanding and treasury shares.
 Shares authorized include both issued (by the board of directors or shareholders) and
unissued but authorized by the company's constitutional documents.

Tax treatment
Tax treatment of dividends varies between tax jurisdictions. For instance, in India, dividends are tax free in
the hands of the shareholder up to INR 1 million, but the company paying the dividend has to pay dividend
distribution tax at 12.5%. There is also the concept of a deemed dividend, which is not tax free. Further,
Indian tax laws include provisions to stop dividend stripping.[4]

Share certificates
Historically, investors were given share certificates as evidence of their ownership of shares. In modern
times, certificates are not always given and ownership may be recorded electronically by a system such as
CREST or DTCC, a central securities depository.

See also
Employee stock ownership
Mutual organization
Scrip issue
Share capital
Social ownership
Stock token

References
1. Chen, James (23 February 2018). "Shares Definition" (http://www.investopedia.com/terms/s/
shares.asp). Investopedia. Retrieved 9 July 2013.
2. Hoang, Paul (2007). "1.4 Stakeholders" (https://archive.org/details/businessmanageme0000
hoan/page/71). Business and Management. Victoria: IBID Press. pp. 71 (https://archive.org/d
etails/businessmanageme0000hoan/page/71). ISBN 978-1-876659-63-9.
3. "Chapter 22 Company-An Introduction" (http://www.nos.org/srsec320newE/320EL22.pdf)
(PDF). Accountancy (http://www.nios.ac.in/320lesson.htm). Noida, Uttar Pradesh, India:
National Institute of Open Schooling. 2008. p. 242. Retrieved 24 August 2011.
4. "All about shares and tax" (http://www.rediff.com/money/2006/jan/16tax.htm). Rediff India
Abroad. 16 January 2006. Retrieved 23 February 2012.

External links
Media related to Stocks at Wikimedia Commons
The dictionary definition of share at Wiktionary

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This page was last edited on 21 May 2022, at 14:21 (UTC).

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