Please note that this journal assignment is based on a pretend scenario and fictitious money. However the assignment is based on actual stock pricing in real time situations. Do not invest your personal money for this assignment.
The capital markets and the ability to raise funds for corporate uses are essential to the US economic systems. For this assignment imagine that you have $25000 to invest in US companies. You are buying used stock. The company got the money when it issued the stock originally. You will be buying it from an existing owner.
You are investing or buying the stock because you believe the company will make money and pay you a dividend in cash. Each share of stock that you buy entitles you to any dividend declared and a vote at the annual stockholders meeting.
The stock also allows you the ability to earn your money back by selling the stock. Of course investing in stocks is risky and there is the possibility that the stock you buy will be worth less when you want your money back. The company is not obligated to give you any of your money back. You will only get your money back if another investor wants to buy your stock.