Why do BIG companies have a stock market?
This morning started playing a stock market game as practice to get used to the stock market and how it works. However, I don't get why HUGE multi billion dollar companies like COCA-COLA or MICROSOFT need a stock market. Even GOOGLE, being a search engine holds very high stocks. Why is this necessary?
Thanks in advance. I know it's a very elemental question but I know nothing about economics.
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Answer by JKat
To be honest, those companies don't NEED to be traded on the stock market, so that's why some of them pay money out in dividends. They know they won't grow allot in the future compared to the past, so they start returning some of their money to shareholders as dividends as a reward for owning the stock. Smaller companies use the stock market to finance their operations because investors give them extra money... but as companies grow to the size of Microsoft, the companies still like getting investors' money but they also pay some of that back with dividends. Microsoft doesn't need the stock market to survive with all their existing cash, but it helps finance some of their operations.
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