Does a company ever pay back the money to shareholders?

does the company ever have to pay that money back to the shareholders in any way, or is it essentially free money for the company?

You pay back loans, but shares are portions of ownership (and it doesn't make sense to pay back ownership).

What the company can do is buy back shares; when this happens, there are fewer shares outstanding.

When a private company goes public it does an initial public offering (IPO) where it offers a portion of its shares to the public in a new stock issuance.

The capital raised from selling these private shares belongs to the company as well as the early shareholders (founders as well as early investors), allocated based on whose shares are sold.

Owners of publicly traded shares can get money back (the amount depends on whether share price is higher or lower than what they paid) if:

• They sell it to other investors/traders
• The company does a buyback
• There is a merger/acquisition

Stocks that aren't dividend stocks today could start paying dividends in the future.

And since a company's shareholders (owners) elect the company's board of directors, and the board of directors can declare dividends, shareholders can, indirectly, control whether the company will pay dividends (or buy back stock.)

Profitable, growing companies that could pay a dividend but don't are choosing to reinvest profits in the company. By forgoing paying a dividend with today's profits, the company may boost its future profits — and future dividends.

As an example: Microsoft was founded in 1975, went public in 1986, and didn't pay a dividend until 2003. That's a long time with no dividends, but eventually the board of directors decided to pay a portion of profit out to shareholders instead of reinvesting it all. High growth, profitable businesses tend, over time, to become "cash cows".

investors gain realized value from partial ownership in a company 3 ways:

1. dividends

2. selling their shares upon company issuing stock buybacks [capital gains]

3. selling their shares to other investors upon appreciation of share price from dynamics other than buybacks [capital gains]

#3 is caused by a variety of mechanisms, but is overall driven by sentiment, desirability, profitability, solvency, future revenue/earnings projections, analyst price targets, and a ton of other metrics and ratios.

If a company isn't paying dividends, there's a reason for that - likely that the company sees more value in investing those earnings into R&D and growth, to bring better products/services to market, in order to increase earnings, so that the stock appreciates even more, satisfying investors.

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a less common one is

4. obtainment of additional stock as a direct consequence of acquisitions and mergers

an even less common one is

5. repayment mandated by bankruptcy law, if a company files for bankruptcy

the last one isn't rare because bankruptcy is rare, but rather owners of common stock are often the last ones on a long list of stakeholders who get bankruptcy-related distributions.