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There's nothing wrong with shareholder dividends, but to add an extra incentive to pay dividends is distortionary and doesn't make much economic sense. On the c
by bhupy 6y ago
There's nothing wrong with shareholder dividends, but to add an extra incentive to pay dividends is distortionary and doesn't make much economic sense. On the contrary, society appears to want to minimize shareholder dividends because that's money that's not going to worker salaries and R&D.
It also ignores the fact that if Amazon had been forced to pay dividends 10 years ago, the stock would be worth significantly less today on account of their inability to re-invest into R&D and enter new business lines and grow from 100,000 -> 1 million employees. Even if we aim to strictly maximize shareholder-value (to the extent that's even desirable), it's penny wise but pound foolish.