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Stocks 105: The Purpose of a Company

Introduction to The Purpose of a Company Money In and Money Out The Two Types of Capital Different Capital, Different Risk, Different Return Return on Capital and Return on Stock The Voting and Weighing Machines Summary of The Purpose of a Company

Introduction to The Purpose of a Company

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To own stock is to own companies and share in risks and returns in ways that bondholders do not. Let's look at these differences.

What you will learn

  • Money In and Money Out
  • The Two Types of Capital
  • Different Capital, Different Risk, Different Return
  • Return on Capital and Return on Stock
  • The Voting and Weighing Machines

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Introduction to The Purpose of a Company

It's worth repeating that when you hold a stock, you own part of a company. Part of being an owner is understanding the financial underpinnings of any given business, and this lesson will provide an introduction.