How Do Small Businesses Work With Stocks?

[UR2BTOAST]

I'm trying to understand how the stock market works with a business. I watch a lot of Shark Tank and that's all centered around equity capital
(with the occasional royalty or debt offer).

1) please explain, in the simplest terms possible, how equity works. My current understanding is
that basically a "shark" like Mark Cuban who closes an equity capital deals is basically investing in stock in the company. If that's true,
then I assume that the dividend that gets paid is in terms of the equity deal(s). For example, if there's an equity capital deal of 35% closed
by one investor, the investor gets 35% of the dividend and the 65% is kept assuming there's nothing else that has to be paid dividend wise.

2) Please explain dividends. How is the "dividend amount paid" determined? Is it every penny of profit? Is it a pre-determined amount? If it's
every penny of profit, then how are things like salary paid? Like say I own a company and we make a $200,000 profit. Say I pay myself a $50,000
salary. Is the dividend then calculated based upon $150,000 (again assuming no other expenses?)

3) Please explain the concept of shares in terms of a startup. How do you get shares, do you have to file something, apply for something..?
How many shares do you get, how do you get more?

Basically my biggest question: In my naive mindset, I always thought that the business makes a profit and the profit gets stored in a bank
account. Then the bank account can be used to pay salaries, expenses, upgrades, new hires, etc. I'm just confused with my pre-assumed mindset
combining that with this huge idea of equity capital.

Thanks for your help!

[woofgang]

As I understand it, the dividend amount paid is decided by the company paying the dividend. It has more to do with how desirable the company want their shares to appear. Share owners don’t care so much about what percentage of the company’s profit is paid as dividend. They are more interested in the dividend as a percentage of the share price, ie could they make a better deal by putting the money in a less risky investment opportunity like a savings account.
Whatever dividend is paid can only be aid of course once other all expenses have been covered, plus setting aside funding for planned expansion or planned plant and equipment renewal plus of course a healthy contingency fund.

[woofgang]

not “aid”, “paid"

[fiction-factory]

Salaries, expenses, new hires are not paid from profits. Profits are the surplus made after all such costs have been taken into account. A dividend level is then paid by the company at what it considers to be an appropriate level as woofgang says

[StockPicks]

Great

[Tony_BNF]

Here you can find all the answers you need, begin from this article: http://valuestockguide.com/guide/how-to-invest-in-stocks/