When individuals purchase stock and bonds issued by a company, what does the company receive?

a)dividends
b)capital
c)profit
d)volatility

Question

When individuals purchase stock and bonds issued by a company, what does the company receive?

a)dividends
b)capital
c)profit
d)volatility

mathmate · Answer

A company which issues stocks is expected to make a profit which (at least in part) will be distributed to stockholders as dividends.  Stockholders pay the nominal or market value of the stock that the company gets for cash flow in order to develop or to maintain its business activities.  If the market price of a stock varies a lot over a short period of time, the stock is said to be volatile.