Definition

Stock is a security that represents ownership in a company and can be traded.

 

Types of Stocks

1. Preferred Stock
   This type of stock has the first right to receive profits and has cumulative dividend rights.

2. Common Stock
   This type of stock will receive profits after the preferred stock dividend is paid.

 

Returns and benefits from owning stock

1. Dividends
   Returns from company profits distributed to shareholders based on the size of their stock ownership.
2. Capital Gain
   Profit obtained from the difference between the purchase price and the selling price of the stock.