4 ms·

Realistically what do you think shareholders do with payouts?

• frebord 9y ago
  Shareholder's are investors, investors invest.
  • xmj 9y ago
    Then why insist on dividends, and not have companies reinvest?
    • WJW 9y ago
      Because they might want to diversify into areas other than where the company operates in?
    • civilian 9y ago
      Sometimes a company has matured, where it's captured most of it's market and it's been around so long that it's not very innovative. A company can be good at just "doing it's thing", and that's okay. But that means that--- if there is not more of the market that a company can efficiently capture, then it's time for the shareholders to reap their ROI. I'm sure you've seen lots of instances of failed innovation in big companies. This is a way to avoid it, and put money where it'll have better odds.
  • dsparkman 9y ago
    Shareholder's are speculators, speculators speculate. Most US public companies do not pay dividends to shareholders. An "investment" in this scenario is not an investment but speculation. You are speculating that you can convince others to pay more for my shares than I paid for them.