We explain what an action is and the types of actions that exist. Also, what common shares consist of.
What is an action?
In the financial world, it is known as a stock a title issued by a specific companyand which is equivalent to the monetary value of one (1) of the equal parts into which the company's capital stock is fragmented.
That is to say: shares are investment documents that assign to its holder the ownership of a portion of the social capitalwhich will be greater the more shares it has. The holders of these securities are known as shareholders.
Commonly, the shareholders of a company enjoy political rights (voting at shareholder meetings to decide the direction of the business), and economic rights (receiving benefits from the company and eventually accruing profits in relation to the amount of securities they manage).
However, as the actions they usually are freely transferablethere are usually majority and minority shareholders, the former always having greater decision-making power by managing larger portions of the corporate capital.
The return on shares, that is, the money they generate for their holder, is usually considered an investment in variable income, that is, it does not have a fixed payment determined by contract in advance, but varies according to the performance of the company and Obviously, to the number of shares you have. But all shareholders of a successful company receive economic benefits from it.
The purchase and sale price of a share will depend on the financial situation of the company at the time of the transaction. In many cases, buying cheap shares and subsequently selling them more expensive is an indicator of good business performance, so the possession of these It is part of the active assets of each investor. This value has different mechanisms to be quantified and assigned, as occurs in stock market indices (the stock market).
See also: Bonds
Types of actions
There are the following types of actions:
- Common or ordinary. They give the holder participation in the corporate assets and the right to speak and vote in the company's corporate boards.
- Preferred. Shares with a generally fixed dividend rate, with payment preference above common ones, for various financial reasons.
- Limited vote. They grant the holder the right to vote only on certain business issues, in exchange they are usually preferred or yield a higher dividend than common shares.
- Convertibles. Those shares that can be converted into bonds (although it is usually the other way around).
- Of industry. Instead of contributing capital to the company, holders provide services or specific work and receive shares of the company in exchange.
- Released. Those that do not require payment by the holder, since they are the payment of benefits or utilities that the holder should have received.
Common shares
Common stocks are, first and foremost, financial assets. They have no expiration dateare fully negotiable and represent a small portion of the company's ownership.
Its issuance usually responds to urgent financing needs, but it's about the most expensive way to raise funds there issince the returns generated in the future must allocate a part to the benefit of shareholders.
Furthermore, selling shares means somehow losing the autonomy of the company, since shareholders generally gain a voice and vote in decision-making.
Shareholders, in addition, have limited liability in the company, that is, their personal assets will not be at risk due to the company's performance nor will they automatically form part of the company's total assets.
In this way, a common shareholder will not be able to lose more than his economic contribution to the company (equivalent to a defined number of shares purchased, for example).
