4 ms·
This is a strawman argument. Cash is not required to be re-invested to maintain current profitability.
by JDDunn9 11y ago
This is a strawman argument. Cash is not required to be re-invested to maintain current profitability.
- phamilton 11y agoThat's not the argument I'm making. I'm not disagreeing with you. The point I'm making, which I admit is an obvious one, is that without profits a dividend will erode a company's value. Simple flow of money. Unless there's a surplus flow of money in, you can't have an outward flow. Therefore, the effect of a dividend on a company's market cap depends on how much profit they have in comparison.