Learn the Basics of Investing in Stocks

Stocks are all the stocks in which ownership of a company is divided ownership. In American English, all the stocks are collectively called as “stock.” Each shareholder (owner) of a company is entitled to an entitlement or right to receive dividends per year from the controlling shareholder of that company. The dividend entitlement is determined by the regulations of applicable government authority. A single share of any type of stock is called “stock.”

Every kind of stocks, whether common or preferred, is entitled to dividends. A dividend payment is the return of income to an investor from the value of his capital. All types of dividends depend on the nature of the issuing company and its financial performance. Dividends are generally paid to help fund the development and expansion of the business, and/or to cover expenses. Generally speaking, there are two kinds of dividends:

Stocks are divided in to two classes based on their meaning. These are known as common stocks and preferred stocks. Common stocks are the stocks that are owned by majority of shareholders of a company. Preferred stocks are those stocks that are owned by a minority of shareholders and entitled for less returns than the common stocks.