penny shares

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Securities with a very low market price (although they may not be as low as one penny) traded on a stock exchange. They are popular with small investors, who can acquire a significant holding in a company for a very low cost. Moreover, a rise of a few pence in a low-priced share can represent a high percentage profit. However, they are usually shares in companies that have fallen on hard times and may, indeed, be close to bankruptcy. The investor in this type of share is hoping for a rapid recovery or a takeover.

Subjects: Financial Institutions and Services — Accounting.

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