Lesson 1: What is Equity?

Equity represents ownership in a company. When you buy shares, you become a part-owner (shareholder).

Shares are small units of ownership that companies issue to raise money.

Investors buy shares for two main reasons:

1. 1. 1. Dividends – a share of the company’s profits.

      2. Capital Gains – selling shares at a higher price than you bought them.

Example: If Safaricom has issued 40 billion shares, and you own 10,000, you hold a small stake in the company.

Key takeaway: Owning shares = owning a piece of a business.