If a business has 400 shares to sell, but only sold 200 of them. Would only half of the overall profit (at the end of the business) be shared between the shareholders, or the whole profit anyway?

[BigBen23]

[suzie1]

half

[buildersmate]

I don't think so.
The profit is shared between those that own the issued shareholding - in this case 200.
If the company has an authorised capital of 400 shares but only 200 of them have been issued, the profit is shared between the 200.
So the answer is the whole profit.

[cassa333]

So the 200 that invested, for arguments sake 10p, get twice as much profit as if the whole 400 were sold for 10p? The company only got £20 but have to give out as much as if £40 was raised?

Is this right?

[buildersmate]

The issued share capital in your first example is £20. The directors of the business use that £20 to make some profit, and part of that is paid back to the shareholders as dividend.
If the issued share capital was £40 (your second example), one would normally expect the business to make profit since it has £40 to play with, not £20. In theory, all things being equal, one might expect the directors to make a similar dividend declaration per issued share as the first example - because they might have made twice as much profit.
The value of your question may go up as well as down.

[sumo19]

Some of the profits may be given to the shareholders in the form of dividends. The directors of the company in theory do not have to give any dividends to shareholders if they do not want to, for reasons such as difficult times or a period where the firm is investing highly.

Dividends are issued at the director's discretion.

Because of the above facts, your question cannot be answered. Not all profit is distributed to shareholders, because firms retain profit for investment projects possibly or for a continguency fund.

In your question you are assuming that all profit is given to shareholders, this is not the case. The answer will depend on policies of the firm i terms of dividend issuing and the proprtion of the profit which will be designated at retained earnings.

Once the directors and finance managers have come up with a some of money that they wish to supply to the shareholders, then this is supplied to them, according and relative to the amount of stock they own.

Does that help?

[sumo19]

*sum* instead if *some* !

[cassa333]

See this is why I don't have answers for these sort of questions... It all just flew over my head LOL