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Understanding shares, equity, ownership, and dividends.
A stock (also called a share or equity) represents a unit of ownership in a company. When you buy a stock, you are purchasing a small piece of that business. The more shares you own, the larger your ownership stake.
Ownership Example
If a company has 1,000 shares in total and you own 100 shares, you own 10% of the company. If the company is worth ₹10 crore, your 10% stake is worth ₹1 crore.
As a shareholder you get: 1) Voting rights at Annual General Meetings, 2) Right to receive dividends, 3) Right to company information, 4) Proportional claim on assets during liquidation.
A dividend is a portion of company profits distributed to shareholders. For example, ITC Ltd pays approximately ₹13-15 per share as annual dividend. If you own 1000 shares, you receive ₹13,000-15,000 per year just for holding the stock.
Top Dividend Paying Indian Stocks (Example)
| Company | Annual Dividend (Approx) | Dividend Yield |
|---|---|---|
| ITC | ₹13.75/share | ~3.2% |
| Coal India | ₹24/share | ~5.5% |
| Hindustan Zinc | ₹25/share | ~4.8% |
Test your understanding. Score 3/5 or higher to mark lesson complete.