How do shareholders gain profits from a corporation?

Shareholders gain profits from a corporation primarily through the sale of shares and dividends. When a corporation generates profit, it may choose to distribute a portion of this profit to shareholders in the form of dividends. This provides a direct return on their investment. Additionally, shareholders may also benefit from selling their shares at a higher price than the purchase price, which reflects the growth and success of the corporation. This dual mechanism—dividend payments and capital gains from shares—illustrates how shareholders can realize profits from their investment in a corporation.

The other options present ways in which shareholders might engage with a corporation, but they do not directly lead to profit. For instance, while shareholders might participate in management decisions, this involvement does not inherently generate profits. Annual audits provide transparency and accountability but are not a means for shareholders to derive financial benefit. Direct sharing of the company's income is not a common mechanism in corporate structures, where profits are rather distributed formally through dividends.