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This lesson explores the role of shareholders in limited companies, the nature of share capital, how market capitalisation is calculated, the purpose and significance of dividends, and the factors that influence share prices. This is part of AQA topic 3.1.2.
Key Definition: Share capital (or ordinary share capital) is the money raised by a company through the sale of shares to investors. Each share represents a unit of ownership in the company.
When a company issues shares, it is effectively selling small portions of ownership. The money received from investors becomes part of the company's capital and is used to fund the business's operations, growth, and investment.
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