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Maharashtra State Board: Class 10
CISCE: Class 10

Definition: Capital

The total amount of money needed to run the company is called the capital.

Maharashtra State Board: Class 10
CISCE: Class 10

Definition: Shares

A share is the smallest unit of the capital of a company. The capital of a company is divided into small equal parts, each of which is called a share.

Maharashtra State Board: Class 10

Definition: Shareholder

A shareholder is a person who owns one or more shares of a company. A shareholder is a part owner of the company in proportion to the number of shares held.

Maharashtra State Board: Class 10

Definition: Stock Exchange

A stock exchange is a place where the buying and selling of shares takes place. It is also known as the share market or capital market.

Maharashtra State Board: Class 10
CISCE: Class 10

Definition: Dividend

The annual profit distributed among shareholders is called a dividend.

Maharashtra State Board: Class 10
CISCE: Class 10

Definition: Face Value / Nominal Value / Par Value (F.V. / N.V.)

The value of a share printed on the share certificate is called its Nominal Value, or Face Value, or Par Value.

Maharashtra State Board: Class 10
CISCE: Class 10

Definition: Market Value of a Share (M.V.)

The shares of different companies can be bought or sold in the market through the stock exchange.

Maharashtra State Board: Class 10

Formula: Sum Invested

Sum Invested = Number of shares × Market Value

Maharashtra State Board: Class 10

Formula: Rate of Return

\[\text{Rate of Return}=\frac{\mathrm{Dividend}}{\text{Market Value}}\times100\]

Maharashtra State Board: Class 10
CISCE: Class 10

Key Points: Important Facts of Share

Term Short Explanation
Share The smallest unit of a company’s capital.
Dividend Part of the company’s profit is distributed per share, calculated on Face Value.
Stock Exchange Market where shares are bought and sold (e.g. BSE, NSE).
Market Index Indicator of stock market performance (SENSEX – BSE, NIFTY – NSE).
Face Value (FV) Value printed on the share certificate (also called par value).
Market Value (MV) The price at which a share is bought/sold in the market.
MV > FV Shares issued at a premium.
MV = FV Share issued at Par.
MV < FV Shares issued at a discount.
Sum Invested Total amount spent to buy shares. Formula: Number of shares × MV
Rate of Return (RoR) Percentage return on investment. Formula: (Dividend ÷ MV) × 100

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