What is the significance of shares in a company?

• A. They provide voting rights to all shareholders
• B. They grant ownership rights in exchange for investment
• C. They are a form of government bond
• D. They guarantee a profit for investors

Answer: (B)

Shares in a company are significant because they grant ownership rights in exchange for investment. When an individual purchases shares, they essentially buy a portion of the company, which entitles them to a claim on its assets and earnings. This ownership means that shareholders can benefit from the company's success through dividends and increased share value. The concept of ownership is fundamental to the structure of corporations; it enables companies to raise capital by selling shares to investors who wish to have a stake in the business. Shareholders often have a vested interest in the company's performance, aligning their financial interests with the company's growth and profitability. Thus, ownership through shares is a critical aspect of how companies operate and fund their projects.