A share is a part or portion of a large one divided among several people, or to which many people contribute. It is one unit of the capital of the company divided equally. It entitles the holder to a share in profits in proportion to the units held.

Companies issue shares that are offered for sale to raise share capital. Shares offered to the public for the first time is called an Initial Public Offer or IPO. The owner of shares in the company is a shareholder (or stockholder) of the company.

A share is a unit of capital that is indivisible. It expresses the relationship as an owner between the shareholder and the company. The face value is the value denominated on the share, and this value multiplied by the total number of shares issued represents the capital. The real value of these shares is determined by the market, based on its supply and demand.

The current value of a public company is equal to the price of its share at any given time. Price multiplied by its outstanding shares is called Market capitalization (market cap). Market capitalization can be seen as an indicator of public opinion regarding the net worth of a company and play a prominent role in determining the stock valuation.

A shareholder of a company is eligible to receive a share of the profits of the company. It could be in the form of a dividend. It is a payment made by a company to its shareholders.

A company gives a dividend when they make a profit or has some surplus. The company can also re-invest the profit into its business. It pays the shareholders a proportion of the profit as a dividend. Dividend distributed to shareholders may be in cash or by way of deposit into shareholder’s bank account. This amount is also given through the issue of Bonus shares or repurchase of shares if the company has plans for reinvestment of dividends.

The dividend is a fixed amount given for each share, and shareholders receive it in proportion to their shareholding. It is the division of profits after-tax among its shareholders. Profits that remain are known as retained earnings and declared in the equity section of the balance sheet. Although companies pay dividends based on a definite schedule, they can also make an interim dividend as a special dividend to distinguish it from the fixed schedule dividends.

One can become a shareholder of a company by acquiring its share through an IPO or buying from the secondary market.