01 / 18
What Is a Share?
🏢 → 📄 → 👤
A share represents a small part of ownership in a company.
Imagine a company is divided into many small ownership pieces.
Each piece can be called a share.
When you buy shares in a company, you are buying one or more of those
ownership pieces.
This means a shareholder is not simply lending money to the company.
They own a portion of the company represented by their shares.
Simple meaning: A share is a unit of ownership in a company.
02 / 18
Think of a Company as a Big Cake
🎂
Share
Share
Share
Share
Share
The whole company can be divided into many ownership units.
Think of a company like a big cake that is divided into many pieces.
The entire cake represents the company.
Each piece represents a small part of the company's ownership.
Those pieces are similar to shares.
The more shares a person owns compared with the total number of shares,
the larger their ownership percentage.
03 / 18
Why Do Companies Issue Shares?
🏢
Company
→
💰
Raises Capital
→
📈
Business Plans
Companies need money to run and expand their businesses.
They may need capital to open new locations, buy equipment, develop
products, expand operations or pursue other business opportunities.
One way a company can raise capital is by issuing shares to investors.
When investors buy newly issued shares, the company can receive capital
for its business activities, subject to the structure of the offering.
04 / 18
What Happens When You Buy a Share?
👤
You
→
💰
Investment
→
📊
Shares
→
🏢
Company Ownership
When you buy shares, you acquire ownership in the company represented by
those shares.
Your ownership is normally very small when you are an individual investor,
but it is still ownership.
The exact rights attached to your shares depend on the type of shares
and the applicable company and securities rules.
Buying one share does not mean you control the company. It means you own
a small part of it.
05 / 18
A Simple Zambian Example
Imagine a Company Has 1,000 Shares
Suppose a company has 1,000 shares in total.
You buy 10 shares.
Your ownership would represent 10 out of 1,000 shares, or 1% of the
company, assuming all shares have equal ownership rights.
The example is simplified to help you understand the basic idea.
Real companies can have different share classes and structures.
Key idea: Your ownership percentage depends on the number
of shares you own compared with the total shares in the relevant class.
06 / 18
What Does “Shareholder” Mean?
👤 + 📊 = 🏢
Shareholder = Person or organisation that owns shares.
A shareholder is someone who owns shares in a company.
For example, if you buy shares in a listed company through the proper
investment process, you become a shareholder in that company.
Shareholders can have certain rights depending on the type of shares
they own and the company's rules.
Being a shareholder means having an ownership interest. It does not mean
you become an employee of the company.
07 / 18
Shares Can Be Bought and Sold
👤
Investor
→
📊
Shares
→
👤
Another Investor
Shares that are traded on a stock exchange can generally be bought and
sold by investors through the market's trading system and the appropriate
intermediaries.
When one investor sells shares, another investor may buy them.
The price at which a transaction takes place depends on the market and
the available buyers and sellers.
08 / 18
What Is a Share Price?
📊💰
The share price is the market price of a share.
The share price tells you how much investors are currently paying for a
share when a transaction takes place.
For example, imagine a share is trading at K25.
If you buy 100 shares at K25 each, the purchase value before applicable
fees and charges would be K2,500.
Simple Calculation
100 shares × K25 = K2,500
Remember that actual transaction costs can increase the total amount
you pay.
09 / 18
Why Does a Share Price Change?
📈 ↕ 📉
Share prices can move up and down.
A share price can change because investors constantly assess the company,
its future prospects, economic conditions and other information.
Supply and demand also play an important role. If more investors want
to buy a share than sell it at a particular price, the price may rise.
If more investors want to sell, the price may fall.
This is why the price you see today may be different tomorrow.
A rising share price does not guarantee that the company will continue
to rise in the future.
10 / 18
Can a Share Make You Money?
Buy
K20
→
Share Value
K30
→
Potential Gain
K10
A shareholder may potentially make money if the value of their shares
increases and they later sell at a higher price.
For example, if you buy a share for K20 and later sell it for K30, the
difference is K10 per share before considering transaction costs and
taxes that may apply.
However, the price could also fall below K20.
There is no guarantee that you will be able to sell your shares for
more than you paid.
11 / 18
What Are Dividends?
🏢 → 💰 → 👤
A company may distribute part of its profits or reserves to shareholders.
Some companies pay dividends to their shareholders.
A dividend is a payment made to eligible shareholders according to the
company's declared dividend and applicable rules.
For example, if a company declares a dividend of K1 per share and you
hold 100 eligible shares, the gross dividend would be K100 before any
applicable deductions.
Simple Example
100 shares × K1 dividend = K100
Not every company pays dividends, and a company can change its dividend
policy.
12 / 18
Share Ownership Can Give You Rights
Owning shares can come with certain rights, depending on the type of
shares and the company's governing documents and applicable law.
- The right to receive declared dividends where applicable
- Possible voting rights at shareholder meetings
- The right to receive certain company information
- Potential participation in corporate decisions where entitled
Different types of shares can have different rights. Always understand
what type of shares you are buying.
13 / 18
Owning Shares Does Not Mean Running the Company
👤
Shareholder
≠
👔
Management
A common beginner misunderstanding is thinking that owning shares means
you personally manage the company.
That is not normally the case.
The company's directors and management are responsible for running the
business according to their roles and responsibilities.
Shareholders are owners and can have certain rights, but owning a small
number of shares does not give you day-to-day control of the business.
14 / 18
What Happens If the Company Grows?
🏢 → 📈 → 💰
A successful business may potentially create value for shareholders.
Imagine a company grows its sales, improves its profits, expands into
new markets and becomes a stronger business.
Investors may value the company more highly, which could potentially
support a higher share price.
However, business success does not guarantee a higher share price.
Share prices are affected by many factors and can fall even when a
company appears to be doing well.
Always separate the quality of a business from the short-term movement
of its share price.
15 / 18
What Happens If the Company Struggles?
🏢 → ⚠️ → 📉
A company's problems can affect its shareholders.
Businesses can face many challenges.
Sales may fall, costs may increase, competition may become stronger or
the company may face other financial difficulties.
When investors become concerned about a company's future, its share
price may fall.
If you own the shares, the value of your investment may therefore fall.
Ownership brings opportunity and risk.
You share in the potential benefits of the business, but you also face
the risk that your investment may lose value.
16 / 18
Share vs Ordinary Product
| Buying a Product |
Buying a Share |
| You buy something to use. |
You buy an ownership interest in a company. |
| The product normally belongs to you to use. |
The share represents part ownership of the company. |
| You usually do not benefit from the company's profits. |
You may potentially receive dividends if declared and applicable. |
| The product is not normally traded on a stock exchange. |
Listed shares can be traded through the stock market. |
A share is not a physical product like a phone or a bag.
It represents an ownership interest in a company.
17 / 18
Test Your Knowledge
Quick Quiz
1. What is a share?
A. A company loan
B. A unit of ownership in a company
C. A bank account
2. If a company has 1,000 shares and you own 100 equal shares,
what percentage is that?
10%
3. Can a share price fall?
Yes. Share prices can rise or fall.
4. Can companies pay dividends?
Yes, some companies may pay dividends to eligible shareholders.
5. Does owning shares mean you manage the company every day?
No. Shareholders and company management have different roles.
Remember: A shareholder owns part of a company, but
ownership also comes with investment risk.
18 / 18
🎓
Lesson Complete!
Excellent! You now understand one of the most important ideas in the
stock market: what a share actually represents.
A share represents an ownership interest in a company. As a shareholder,
you may benefit from the company's success through potential share-price
growth and, where declared, dividends. But you also take the risk that
your investment can lose value.
Key message:
When you buy a share, you are buying a small piece of a company.
Before buying any share, learn about the company, understand the risks
and make an informed decision.
