When you invest in a stock, you are essentially buying part ownership of a company, including its physical plant, output and everything it owns. As a shareholder, you are entitled to a proportionate share of the corporation's profits and assets.
Businesses issue stock to raise capital. By issuing stock, a company generally can raise more capital than it could borrow. In addition, the company does not have to make periodic interest payments to creditors or make principal payments.
Conversely, by issuing stock, the principal owners have to share their ownership with other shareholders. And, shareholders have a voice in policies that affect the company's operations.
Businesses issue stock to raise capital. By issuing stock, a company generally can raise more capital than it could borrow. In addition, the company does not have to make periodic interest payments to creditors or make principal payments.
Conversely, by issuing stock, the principal owners have to share their ownership with other shareholders. And, shareholders have a voice in policies that affect the company's operations.
| Outline | |
| 1 | Common and Preferred Stock |
| 2 | Stock Splits and Dividends |
| 3 | Types of Stocks |
| 4 | Market Capitalization |
| 5 | Understanding Stock Exchanges |
| 6 | Market Indicators |
| 7 | Risk |
| Start The Tutorial >> | |