Final answer:
In stock transactions, ownership is transferred when shares are bought from the current owner, not when money changes hands. The original issuing firm does not receive any financial return in these transactions.
Step-by-step explanation:
In the context of corporate stock transactions, ownership is transferred when a buyer purchases shares of stock from the current owner, rather than when money changes hands. This means that the firm that originally issued the stock, such as General Motors, does not receive any financial return when shares are bought and sold.
For example, when you buy shares of General Motors stock, you are buying them from another shareholder, not from General Motors directly. This transaction transfers ownership of the stock to you, but the money you pay does not go to General Motors.
This pattern is similar to buying a house, where the money you pay goes to the current owner, not the builder of the house. When you buy stock shares, you are purchasing a portion of the ownership of the company from the current owner, and the original issuing firm is not involved in this transaction.