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Shares representing an ownership interest in a company, generally carrying ordinary voting and residual profit rights.
A company can issue shares to raise equity capital. Existing shareholders may then own a smaller percentage unless they participate or other arrangements offset the dilution. Ordinary shareholders generally receive value after creditors and any higher-ranking claims if the company is wound up. During normal operations, cash dividends depend on lawful decisions and available resources rather than a fixed entitlement to annual payments.
Suppose a company has ten million ordinary shares and an investor owns 100,000. The investor's stake is 1%. If the company issues another five million equivalent shares and the investor buys none, the stake becomes about 0.67%. The business may receive useful new funding, but that does not preserve the investor's former percentage or guarantee that the share price will rise.
Scotia buyout clears shareholder vote; court approval remains