Stocks represent ownership in a firm, where shareholders receive profits through dividends and capital gains.
Stocks represent ownership in a firm, where shareholders have a portion of ownership and the right to a share of the firm's profits. When a company sells stock to the public, it receives financial capital through an initial public offering (IPO). One can earn a rate of return on stock through dividends given by the firm and capital gains from selling the stock at a higher price.
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