A stock — also called a share — is a unit of ownership in a company. Owning one makes you a shareholder, entitled to a portion of the company’s profits and, in most cases, a vote on major decisions. If the company grows, the value of your share can rise; if it struggles, that value can fall, and shareholders are paid last if the company is wound up.
Key takeaways
- A stock represents ownership, not a loan — there is no promise of repayment.
- Returns come from two places: price appreciation and dividends.
- Shareholders rank behind lenders and bondholders if a company fails.
In Ethiopia
Ethiopians have long held shares in banks and insurance companies bought directly from the issuer. What changed with the opening of the Ethiopian Securities Exchange is the ability to buy and sell listed shares on a regulated secondary market rather than privately.
