When you buy a share, you become part owner of a business Income from Some businesses share their profits with their owners in the form of dividends equities If a company does well, its dividends tend to grow over time, but there is never a guarantee dividends will be paid Equities are issued by companies aiming to raise money A share of the profits by offering a share of ownership in the company Dividends are a share in the profits of the company paid to investors. The most common way of investing in to shareholders and will vary depending on the company’s equities is by buying shares of companies listed on a business strategy and how well it is doing. The directors stock exchange. of the company will decide how much profit – if any – is For growth and for income to be paid out in the form of a dividend to shareholders, and how much profit should be reinvested in the company The value of shares will fluctuate depending on how to drive future growth. much investors are willing to pay for them at different times. This is affected by a number of factors, such as the past fortunes of the company, perceived prospects for the business, broader economic trends or simply investor sentiment. Investors make money in shares by selling them for more than they bought them for. In this way, equities can provide capital growth. It is also possible to generate income from equities in the form of dividends. 6