4 ms·

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.