Stockholder

Definition

A stockholder, also known as a shareholder, is an individual or entity that owns shares in a corporation. Stockholders have a claim on part of the company's assets and earnings based on the number of shares they own.

5 Must Know Facts For Your Next Test

1. Stockholders have the right to vote on important company matters such as electing board members.
2. Dividends, which are distributions of a portion of a company’s earnings, may be paid to stockholders.
3. Stockholders can profit from capital gains when they sell their shares for more than they paid.
4. Ownership of stocks can be transferred through buying and selling in financial markets.
5. Minority stockholders hold less than 50% of a company's shares and usually do not have control over corporate decisions.

Review Questions

Related terms

Dividend: A dividend is a distribution of profits by a corporation to its shareholders.

Capital Gain: A capital gain is the profit realized from the sale of assets or investments like stocks.

Board of Directors: The board of directors is a group elected by shareholders to oversee the activities and strategic direction of a company.