Module I·Article I·~1 min read

Equity

Basic Financial Instruments

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Equity (Common stock / Ordinary shares) are common shares that grant voting rights and entitle the holder to dividends and assets after creditors.

Preferred stock / Preference shares are preferred shares with a guaranteed fixed dividend, but without voting rights.

Voting vs non-voting shares: shares with voting rights at meetings vs those without such rights (cheaper, but with no influence).

ADR (American Depositary Receipt) is an American depositary receipt for a foreign share (for example, Yandex in the USA).

GDR (Global Depositary Receipt) is the global version of an ADR, traded on global exchanges.

Stock options: the right to buy a share in the future at a fixed price (often used as compensation in startups).

RSU (Restricted Stock Units): a promise to grant shares after N years, provided you remain at the company.

ESOP (Employee Stock Ownership Plan): a program where employees own a stake in the company.

Warrants: the right to buy a share (similar to an option, but issued by the company, usually for a longer period).

Convertible securities: a bond or a preferred share convertible into a common share.

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