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> While EPS is widely used as a way to track a company’s performance, shareholders do not have direct access to those profits. A portion of the earnings may be

> While EPS is widely used as a way to track a company’s performance, shareholders do not have direct access to those profits. A portion of the earnings may be distributed as a dividend, but all or a portion of the EPS will be retained by the company. https://www.investopedia.com/terms/e/eps.asp https://www.investopedia.com/terms/e/eps.asp

matt4077 8y ago
This is getting insane... Would you, please, apply your point to the original statement, namely: they would hold the same percentage of profit and control that their stock certificate was originally issued for. Then, pray tell, in your opinion, when a company buys back one of two remaining shares, making you the sole owner of the company, does this a) Have absolutely no effect on your share b) makes your share more valuable, because it has become a rare collectors' item or c) doubles the future percentage of profits your receive, from 50% to 100%, because irrespective of any profits distributed via dividends or not, the question was only about the share of those profits and not their absolute amount, and even under that strange misreading, even the profits you receive in absolute terms would double under the typical assumption of "all else being equal" and "nobody is really that stupid"
- gamblor956 8y ago
  A) correct B) No, because there are still plenty of authorized shares being held in reserve by the company that it can reissue. C) Theoretically yes, because dividends are allocated pro rata on a % basis of outstanding stock (assuming 1 class of common stock). If there are multiple classes, or preferred stock, or the company reissues shares, or a million other things, then this may or may not still be true.
  - shaki-dora 8y ago
    How, can (a) and (c) both be correct, if (a) is “no effect”, and (c) is, in your opinion, “yes it doubles the value, but may have different effects if bla bla...”
    - gamblor956 8y ago
      It doesn't double the value of his shares. It merely doubles the size of the dividend he receives, assuming that the company doesn't change the size of the dividend to account for having fewer shareholders (which was an explicit part of the hypothetical of the comment I replied to). In the real world, the company would simply reduce the size of the dividend so his take-home is the same.

matt4077 8y ago

This is getting insane... Would you, please, apply your point to the original statement, namely: they would hold the same percentage of profit and control that their stock certificate was originally issued for. Then, pray tell, in your opinion, when a company buys back one of two remaining shares, making you the sole owner of the company, does this a) Have absolutely no effect on your share b) makes your share more valuable, because it has become a rare collectors' item or c) doubles the future percentage of profits your receive, from 50% to 100%, because irrespective of any profits distributed via dividends or not, the question was only about the share of those profits and not their absolute amount, and even under that strange misreading, even the profits you receive in absolute terms would double under the typical assumption of "all else being equal" and "nobody is really that stupid"

gamblor956 8y ago
A) correct B) No, because there are still plenty of authorized shares being held in reserve by the company that it can reissue. C) Theoretically yes, because dividends are allocated pro rata on a % basis of outstanding stock (assuming 1 class of common stock). If there are multiple classes, or preferred stock, or the company reissues shares, or a million other things, then this may or may not still be true.
- shaki-dora 8y ago
  How, can (a) and (c) both be correct, if (a) is “no effect”, and (c) is, in your opinion, “yes it doubles the value, but may have different effects if bla bla...”
  - gamblor956 8y ago
    It doesn't double the value of his shares. It merely doubles the size of the dividend he receives, assuming that the company doesn't change the size of the dividend to account for having fewer shareholders (which was an explicit part of the hypothetical of the comment I replied to). In the real world, the company would simply reduce the size of the dividend so his take-home is the same.