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why would the stock price ever appreciate? Reinvested dividend money; see a sibling comment somewhere in here that addresses this. If the company doesn't pay a
by mikestew 8y ago
why would the stock price ever appreciate?
Reinvested dividend money; see a sibling comment somewhere in here that addresses this. If the company doesn't pay a dividend, that money has to go somewhere, so it gets accounted for in the stock price (a vast oversimplification, yes).
- oarabbus_ 8y agoThat was likely my own comment; and it was comparing a company that didn't pay dividends to the exact same company which does pay dividends. In this scenario with equivalent cash flows, expenditures, and expectations of future growth the non-dividend company will have a higher share price. Share price _increases_ however only occur when the market expects the company to _grow_ revenues (profits), not sustain them. In other words, your comment isn't accurate, that would not cause the share price to increase. Only actual growth, expectation of growth, or market manipulation will cause share prices to increase.