Final answer:
Corporate owners earn money through dividends, capital gains on the sale of stock for a profit, and potential W-2 income if they are employed by the corporation. The amount gained through dividends is based on the number of shares owned, while capital gains result from the appreciation of stock value. The correct answer is option B.
Step-by-step explanation:
Corporate owners make money through several methods:
• Dividends: When a company pays a dividend, it distributes a portion of its profits to shareholders based on the number of shares they own. For example, if a company pays a dividend of 75 cents per share, an owner with 85 shares would receive a payment for holding the stock.
• Capital Gains: Owners can sell their stock for more than the purchase price. If an investor bought stock for $45 and sold it for $60, they would realize a capital gain of $15.
• W-2 Income: If the owner also works for the corporation, they may earn a salary or wages that are reported on a W-2 form.
It's important to note that when corporate stock is traded between investors, the company originally issuing the stock does not receive financial benefits from these transactions, similar to how a house builder doesn't benefit from a home resale.