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Share (Stock)

A share represents a portion of a joint-stock company’s capital and gives its holder shareholder rights such as dividends, voting and pre-emption on new shares. Called a “pay” in CMB legislation, a share means owning part of a company.
Contents
  1. 1.Key points
  2. 2.Formula / calculation
  3. 3.Worked example
  4. 4.Interpretation
  5. 5.Pitfalls
  6. 6.Official sources
  7. 7.Frequently asked questions

Key Points

  • Shares traded on Borsa Istanbul are held in book-entry form in the MKK system and traded under four- or five-letter tickers (such as THYAO).
  • Over the long term shares let investors share in the growth of company profits, so their return potential and risk exceed those of fixed-income instruments.
  • concentrating in a single stock magnifies risk; one company-specific shock can wipe out much of the investment.

Formula / Calculation

Market capitalisation = Number of shares × Share price. Total return from a share = Price change + Dividends received. A share entitles its holder to the company’s profit and equity in proportion to the stake held.

Worked Example

Illustrative

If a share bought at TRY 100 is sold a year later at TRY 115 and TRY 5 of net dividends per share was received in between, the total return is (115 − 100 + 5) / 100 = 20%.

The figures are hypothetical values chosen to explain the concept; they are not data for any real fund, stock or market.

Interpretation

Over the long term shares let investors share in the growth of company profits, so their return potential and risk exceed those of fixed-income instruments. Ratios such as P/E, P/B and EV/EBITDA are used for valuation, and balance sheets and KAP disclosures for analysis.

Pitfalls

concentrating in a single stock magnifies risk; one company-specific shock can wipe out much of the investment. Short-term prices can swing excessively on news and sentiment. Neither dividends nor price gains are guaranteed.

Official Sources

Official regulation and sources the definition is based on.

Pages Where This Term Appears

Related Terms

Frequently Asked Questions

A share represents a portion of a joint-stock company’s capital and gives its holder shareholder rights such as dividends, voting and pre-emption on new shares.

Market capitalisation = Number of shares × Share price. Total return from a share = Price change + Dividends received. A share entitles its holder to the company’s profit and equity in proportion to the stake held.

Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy