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Chapter 1 What is a Stock

Billions of stocks are traded every day. How are these stocks generated and how are they priced? In order for stocks to be continuously traded among people, a company should first be created. How did this start? Where will the funds the company needs come from?

To answer the above questions, this chapter fictionalizes a newly established company—NewBrite Lighting Company. Corporate management is now facing a problem that all successful companies must address. The company elects board members, issues shares, reinvests profits in production and business activities, and announces a dividend distribution plan. Through this process, readers will understand how the capitalist economic system operates and gain a deep understanding of this system that has created the world's developed economies.

Xinyao Lighting Company

A young inventor Jack has just invented an LED lighting equipment with higher brightness, higher efficiency and novel design. Encouraged by family and friends, he decided to turn his hobby of improving lighting equipment into his own business and devote himself entirely to running the business instead of just selling his invention patent to a large lighting company.

Although Jack himself has some savings to invest in it, it is a drop in the bucket and the amount is far less than starting a business...