This page gives a graphic explanation of the relation between investors and corporations that issue stock. Students should start at the top, where the fictional "Acme Products Corporation" is described as needing money to start or expand a business.
 
   The company prepares the stock certificates, or shares, that it will send to the people who invest money in the corporation by buying shares of stock.
 
   The graphic also describes how people who have saved money can invest it in a corporation.

   Students should understand why this is an important financial system for creating progress.  It allows people with good business ideas but not enough money to get together with people who have extra money but no business plans of their own.
 
   Notice that the graphic deals only with the initial selling of stock by the corporation, and not with later sales of that stock by one investor to another.  It is also somewhat simplified - normally banks and stock brokers also play roles in the selling and buying of stocks.

   The bottom half of the page explains how investors make money from their investments.  It shows a woman receiving a dividend check - her share of the profits of a company she owns stock in.  It also explains that investors can sell their stock to other investors.  Such sales make up most of the action in the stock market.

Making the chart, page 181