Final answer:
An individual can gain from owning corporate stock either by receiving dividends or by selling the stock for a higher price than they paid, known as capital gains.
Step-by-step explanation:
There are two primary ways in which a person can realize a gain from owning corporate stock. The first way is through receiving dividends, which are direct payments made by a firm to its shareholders out of its profits. The second way to make a gain is through capital gains, which occur when the value of a stock increases over time, allowing the investor to sell the stock for more than the purchase price.
For example, if an investor buys a share of stock in a company like Wal-Mart for $45 and later sells it for $60, the investor has realized a capital gain of $15. An important aspect for investors to recognize is that companies expected to grow and earn high profits may pay high dividends or increase in stock value over time, allowing for potential gains.