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Article: Stock
- Article from:
- Gale Encyclopedia of U.S. Economic History
CopyrightCOPYRIGHT 2000 The Gale Group Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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STOCK
Stock is a form of ownership interest in a company and a way for companies to fund their growth. A share of stock in a company represents a fraction of ownership or equity in that company's assets and growth. In exchange for giving the shareholder a piece of ownership, the shareholder takes the risk that the earnings of the company will decline, which could reduce the value of the shareholder's initial investment. The buyer of a company's stock is willing to take this risk because if the company's earnings grow rapidly the stockholder gets to share proportionately in that wealth. For example, an investor bought $1000 of stock in Digital Equipment Corporation in 1991 saw the ...