1.7What is a share?
1What is it?
A share is one single unit of ownership in a company. If a company is divided into 1,000 equal pieces, each piece is one share.
2Why does it exist?
Dividing ownership into equal units makes it simple to calculate who owns how much, to share profits fairly and to trade small pieces.
3Real-life example
Think of a pizza cut into 8 equal slices. Each slice is one share. If you own 2 slices, you own 2/8 = 25% of the pizza. If the pizza becomes more valuable (say a famous chef signs it), each slice becomes more valuable too.
4Stock market example
Reliance Industries has over 1,300 crore shares. If you own 10 shares, you own a tiny fraction of Reliance, but you still legally own part of it.
5Diagram
- Your 2 slices25%
- Other 6 slices75%
6Calculation
Ownership % = Your shares ÷ Total shares × 100
- Your shares = 2, total = 8
- 2 ÷ 8 = 0.25
- 0.25 × 100 = 25%
You own 25%.
7Quick revision
- A share is one unit of ownership.
- All shares of the same type are equal.
- Ownership % = your shares ÷ total shares × 100.
8Knowledge check
Q1. A company has 500 shares. You own 50. What % do you own?Show answer
50 ÷ 500 × 100 = 10%.
Q2. In the pizza example, what is one share?Show answer
One slice.
Q3. Does owning 10 Reliance shares make you an owner?Show answer
Yes, a very small part-owner (a shareholder).
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