Definition for : Share

A share is a unit of Equity ownership in a company. Shares thus constitute a source of financing for the company, just as Debt instruments (or Debts) do, even though there is clear and well-defined difference between the two. Shares have unlimited Maturity (exit is only by Transfer/sale of the share, there is no contractually fixed repayment date or Value), and Shareholders incur the same Risks as the company (they receive no Income if the company is in poor health and in the event of Liquidation, Shareholders are paid out after creditors when the proceeds of asset Sales are distributed. In other words, most of the time, Shareholders recovers nothing after Liquidation proceedings). In exchange for this Risk, a share entitles Shareholders to a share in the company's profits and gives them a say in managing the company via voting rights. See also Shareholders' equity. Also called Stock.

(See Chapter 23 Options of the Vernimmen)

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