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Lesson · Finance Academy · Beginner

Shares

Shareholder rights, dividends, P/E and the reaction to earnings reports.

A share is a stake in the ownership of a company. A shareholder is entitled to a part of the profit (if the company pays dividends) and, as a rule, to a vote at meetings.

Dividends are not mandatory: many companies reinvest their profits in growth.

The P/E multiple (price / earnings per share) shows how much investors pay for 1 unit of annual profit.