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> Suppose there was a company that publicly stated that it would never give out dividends, but it was making bank. People like yourself would assume at some poi
by zodiac 9y ago
> Suppose there was a company that publicly stated that it would never give out dividends, but it was making bank. People like yourself would assume at some point in the future dividends would be paid out
Why would we do that?
- tabeth 9y agoBecause there's uncertainty in the world. People lie, the world changes, etc. Company A says no dividends ever, while maintaining soaring stock prices. Company A fires its CEO and Company A gets a new CEO. The new CEO doesn't say there will be dividends, but you assume they'll turn around so you buy, etc.
- zodiac 9y agoWell then the value of that stock reflects the future dividends of that stock in that scenario, weighted by how likely that scenario is to happen. Not sure what your point is then.