this post was submitted on 02 Nov 2024
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Huh, good point, I never thought about that. Makes sense. I only ever heard about options to get shares when the company becomes publicly traded. Of course, publicly traded is what I meant.
Do the owners also get money based on the shares?
Correct; for private companies, any net profit after taxes can be distributed to shareholders as dividends.
Most companies will keep some cash on hand to cover a negative performing period (ie. when costs exceed revenue), so not all profits would be distributed every quarter.