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Academic Word List: Exercise 20

Read the following text, paying particular attention to the highlighted words.

Stocks

Stock, in business and finance, refers to certificates representing shares of ownership in a corporation. When individuals or organizations purchase shares in a company, they receive stock certificates indicating the number of shares they have acquired. Such certificates entitle them to shares in the profits of the company, which are paid out at intervals, in the form of dividends. Besides a claim on company profits, stockholders are entitled to share in the sale of the company if it is dissolved. They may also vote in person or by proxy for corporation officers, inspect the accounts of the company at reasonable times, vote at stockholders' meetings, and, when the company issues new stock, have priority to buy a certain number of shares before they are offered for public sale. Because stocks are generally negotiable, stockholders have the right to assign or transfer their shares to another individual. Unlike a sole proprietor or partner in a business, a stockholder is not liable for the debts of the corporation in which he or she has invested. The most the stockholder can lose if the company fails is the amount of her or his investment. According to the New York Stock Exchange, about 47 million people in the U.S. owned stocks in publicly held corporations in 1985.

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