Chapter 7 - Economics – Stocks and Bonds   Corporations sell stock in their corporations to consumers.  Stockholders/ Shareholders – people who buy stock in a corporation. They are part owners of the corporation.

Stock’s (Cont’d.) In turn, the corporation uses this money to help their business grow.   Profits made by the business are distributed to stockholders/shareholder. These are called dividends.

There are two types of stock that people can buy: Stocks (Cont’d) There are two types of stock that people can buy: Preferred Stock – you receive a stated dividend each year. i. Do not get to vote at annual company meetings. Common Stock – Do not receive a stated dividend every year. If the company has enough money at the end of the year, they may pay Common Stockholders a dividend. Are allowed to vote at annual company meetings.

Buying and Selling Stock A way to make money with stocks is through buying and selling individual stocks. When you buy stock in a corporation, you are said to be making an investment in the corporation. Investment – using money to earn interest or income, in the hopes of making a profit.