What is the defined term for part ownership in a company that entitles shareholders to dividends?

Prepare for your IB Business Management Exam with multiple choice questions and in-depth explanations. Get ready to excel and achieve your goals!

The correct answer, which defines part ownership in a company that entitles shareholders to dividends, is share or stock. When individuals purchase shares or stocks of a company, they acquire a fractional ownership of that company. This ownership not only allows them to benefit from potential increases in the company's value but also gives them the right to receive dividends—payments made by the company to its shareholders from its profits.

Dividends are typically distributed in proportion to the number of shares held, making it a direct reward for the investment made by shareholders. Additionally, owning shares also provides shareholders with voting rights in corporate decisions, further enhancing their role in the ownership of the company.

Other terms listed in the choices refer to different financial instruments or forms of investment. Bonds represent a loan made to a company or government and do not involve ownership or dividends but rather interest payments. Debt securities are similar, as they refer to instruments that signify a loan made by an investor to a borrower, entailing repayment rather than ownership. An equity stake does imply ownership but generally refers to the value of ownership in a company and does not specifically denote the units of ownership (shares) that grant dividends.

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