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Difference Between Stocks, Shares And Dividends

Some business terms can be a little bit confusing but if you take a step back and really look at it, it is not so confusing after all.

Stocks, Shares and Dividends can be some of those terms that may fall in this category, particularly if you are not in the business world.

Below is a simplified explanation. Let’s take a look at them one after the other ;

STOCKS:  Is often used to determine the OWNERSHIP certificate of ANY company. In a more simplified way, stocks are the entire shares into which the ownership of a company is divided.

This translates, a stock is a form of security that gives stockholders a share of ownership in a company. Stocks are also called “EQUITY”.

Now, let’s take a look at what “SHARES” really mean;

SHARES: Refers to the STOCK certificate of a PARTICULAR company. In other words, Shares represents units of Stocks.

They are the tiny breakdown of a company’s worth or stocks that provide for a specific amount of distribution in regards to the profit of a particular organization which is often declared in form of DIVIDENDS.

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A person who owns a share in a company is referred to as a SHAREHOLDER.

DIVIDENDS: Is the distribution of profits by a corporation to its Shareholders. Dividends are usually given in form of cash, reward, stocks or any other form to Shareholders.

In addition, dividends are usually a part of the profit the company makes. Companies have different policies.

Some companies decide to pay their dividends monthly, quarterly, annually or semi-annually.

Dividends are usually distributed per share of stocks.

Hope things are a bit clear now with the above explanations.


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