What is a share?
Posted by bsesensex on June 19, 2008
Question: What is a share and how is its value calculated?
Answer: Let us assume that there is a company A. Let us say that the worth of the total company is Rs. 5 Crore.
Now let us assume that the company issues 100,000 (one lakh) shares.
So, each share will divide the ownership of the company by a factor of 100,000 and therefore each share will be worth Rs. 5 Crore divided by 100,000 which is equal to Rs. 500. Each share will then become worth Rs. 500.
So, in other words, when you own one share of a company, you own a small (very small) part of that company. If the company has one crore shares then you own 1 by Crore part of that company.
This entry was posted on June 19, 2008 at 4:51 pm and is filed under Dummy's Guide to Stocks. Tagged: bombay stock exchange, bse, company, national stock exchange, nse, share, share issues, share price, shares issues, stock, stock exchange, stock price. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
What is a share? · Stocks.ExplainedOnline.Net said
[...] Original post by [Technorati] Tag results for stocks [...]