Share (finance) explained to kids

A share is a small part of a company that people can buy. When people buy shares, they become part-owners of the company. The more shares a person owns, the more of the company they own. People buy shares for two reasons. The first reason is that they hope the shares will go up in value. This is because as the company does well, the value of each share goes up. The second reason is that people hope to get paid dividends. Dividends are payments that companies make to their shareholders. These payments are usually made once a year, and they are a way for companies to share their profits with their shareholders. Shares can be bought and sold on the stock market. The stock market is a place where people trade shares. People who buy shares hope that the shares will go up in value so they can sell them later at a higher price and make a profit. There are different types of shares. The two most common types are ordinary shares and preference shares. Ordinary shares are the most common type of share. They give people the right to vote at shareholders’ meetings and to receive dividends. Preference shares usually don’t give people the right to vote, but they do give people the right to receive dividends before ordinary shareholders. Shares are a way for people to invest money in a company. When people buy shares, they become part-owners of the company. The more shares a person owns, the more of the company they own.