What do stocks represent in a company?

Stocks represent ownership shares in a company, meaning that when you purchase stocks, you are buying a portion of the company itself. This ownership entitles you to a claim on a part of the company's assets and earnings. Shareholders may have the right to vote on key issues, participate in decision-making processes, and receive dividends when the company distributes profits.

In contrast, the other options describe different financial instruments or concepts. Stocks are not liabilities; instead, they indicate ownership equity. They are also not a form of loan, as loans typically involve borrowing and repaying money with interest, rather than ownership stakes. Finally, while stocks can lead to potential income through dividends, they do not guarantee income like fixed-interest investments do. The uncertainty of stock performance and the market means that income from stocks can fluctuate, unlike guaranteed sources of income.