Joint-stock companies

Definition

These are businesses owned by shareholders who each contribute some money to the company's capital. Profits and losses are shared among shareholders according to their investment.

Related terms

Stock Market: A place where buyers and sellers meet to trade stocks/shares. The stock market allows companies to raise money by offering stock shares and corporate bonds.

Dividends: These are payments made by a corporation to its shareholders, usually in the form of cash or additional shares. It's like getting a slice of the pizza profits in our analogy.

Capitalism: This is an economic system where private entities own the factors of production. The four factors are entrepreneurship, capital goods, natural resources, and labor.