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Roughly speaking, if a company doesn’t pay a dividend, it reinvests the profits in itself which compounds its own stock price. You get the benefits of compoundi
by Moodles 7y ago
Roughly speaking, if a company doesn’t pay a dividend, it reinvests the profits in itself which compounds its own stock price. You get the benefits of compounding stock prices that way. I think we are arguing over semantics.
- tempsy 7y agoIt’s analogous, depending on the company, but it’s still a misnomer to use compound interest to describe stocks when by definition is only appropriate to describe a loan or deposit (e.g. principal and interest payment)
- deleted 7y ago[deleted]