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“shareholders have a claim on assets in the event of dissolution“ So why does my Apple stock have such a high value? Apple has a low probability of being disso

• supercanuck 8y ago
  In theory, you are paying for the future dividends. https://en.m.wikipedia.org/wiki/Dividend_discount_model https://en.m.wikipedia.org/wiki/Dividend_discount_model In reality... https://en.m.wikipedia.org/wiki/Greater_fool_theory https://en.m.wikipedia.org/wiki/Greater_fool_theory
  • betterunix2 8y ago
    Actually, in the case of Apple, they announced a sizable share buyback earlier this year, so even if you only plan to hold the stock long enough to sell it for a capital gain you might still be receiving a dividend. AAPL is one of the worst examples of the greater fool theory at work, given that Apple pays a regular dividend, buys back stock, and has a relatively low P/E ratio for a tech company.
• andrewla 8y ago
  You omitted the second part of that > as well as rights to participate in government of the entity It's easy to underestimate this -- the price of the stock represents a barrier to acquisition of the company. If the stock falls below a certain point, it would become profitable for an entity or group of entities to gain a controlling interest and reform the company in a way that suits their needs. That is, not just the promise of future dividends paid to the shareholders, but a barrier against the profits being dispersed in a more aggressive fashion.