As long as shares of a stock are trading in the secondary market, the issuing company is required to release regular reports detailing its financial status and other information that investors need to make informed decisions.
How the capital markets benefit
The investors who profit from the trades will put their earnings into savings accounts or use them to make more investments, swelling the capital markets. And the more activity in the capital markets, the larger the potential sources of capital in future years, when the company might decide to raise money once again.
Professor Samuel L. Hayes,
Harvard Business
School
Professor Samuel Hayes explains how capital fuels the growth of a company.
Think of a company as a giant machine and of capital as the grease that makes its gears turn. Companies need capital to buy new plants, machines, computers, software, and other tangible fixed assets we see listed on a company’s balance sheet. They need capital to finance their inventories and cover uncollected invoices. And they sometimes use capital to pay for research and development, which will, hopefully, fuel future company growth.
How the capital markets benefit
Professor 