Final answer:
Dividends received by shareholders can be expressed in two ways: direct payments by the firm and capital gains from selling the stock at a higher price. Companies pay dividends to distribute a portion of their profits to shareholders, while capital gain refers to the increase in stock value between its purchase and sale.
Step-by-step explanation:
Dividends received by shareholders can be expressed in two ways: as direct payments by the firm and as a capital gain achieved by selling the stock for more than the purchase price. When a company pays a dividend, it gives a portion of its profits directly to the stock owners. The amount of dividend received depends on the number of shares owned. On the other hand, a capital gain is the increase in the value of the stock between when it is bought and when it is sold. This gain can be realized when the investor sells the stock at a higher price than they paid for it originally.