Employee Stock Purchase Plan (ESPP): How It Works and What to Do With It
Warren Team
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Key terms
- StockA share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
- Blue-Chip StockStock in a large, well-established, and financially sound company with a history of reliable performance. Examples include Apple, Microsoft, and Johnson & Johnson.
- Growth StockStock in a company expected to grow earnings faster than the market average. Typically reinvests profits rather than paying dividends. Higher potential returns but more volatile.
- Large-Cap StockStock in a company with market capitalization over $10 billion. Generally more stable and less volatile than small-cap stocks. Examples include Apple, Microsoft, and Amazon.
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