DOES BUYING A STAKE IN A CORPORATION MEAN YOU TAKE THAT PERCENTAGE OF PROFIT?

When shopping the company, when it’s the percentage, for example, shopping 25% interest in Google, does it meant which financier will additionally take 25% of the distinction or not? Do people or corporations deposit in alternative companies to re-sell for increase only?
Is this opposite from purchasing stocks? I mean, we do not consequence any association profits. Stocks have been purchased to re-sell for increase only.

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{ 2 comments }

George February 24, 2011 at 10:31 am

Buying a “stake” in the business is the same as purchasing stock. Owning stock does not entitle you to the same percentage of profits. As a stockholder you gain value if the stock price increases or if the company pays you a dividend.

jeff410 February 24, 2011 at 10:49 am

Google doesnt pay a dividend. Earnings are retained to invest back into the company. But many companies do pay dividends. You get paid dividends in proportion to the number of shares you own which equates to a percentage of the company. If you owned 25% you would get 25% of the dividends paid. Whether or not a company pays dividends or not if they go bankrupt you can lose everything you have invested, If the company is liquidated and there is anything left over you would get 25% of that amount.

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