The Basics of Stock: Stocking Up
As defined in Chapter 4, stock represents ownership in a company or corporation. Each share of stock represents a proportional stake in the company’s assets and profits. This also means that each share has a proportional stake in the success or failure of the corporation.
Investing in stock can provide profits to you in primarily two ways: through dividends and through capital gains. While these were already described in Chapter 5, here’s a quick reminder of what they are. As a shareholder of the company, you are entitled to receive any profits that the company chooses to distribute to its owners. ...
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