3 ms·
Value is created by the company making profits. How it uses those profits, whether by paying out dividends, buying back stock, or investing in the business, is
by joosters 5y ago
Value is created by the company making profits. How it uses those profits, whether by paying out dividends, buying back stock, or investing in the business, is mostly irrelevant to the value creation part.
- DocTomoe 5y agoSo, given that dividends are priced in to the value estimation by investors - which we have established is completely disconnected from actual value - and priced out once paid... it turns out that for exchanges, value is not very relevant?
- klodolph 5y ago> … which we have established is completely disconnected from actual value … This part is false. The price of a stock is not completely disconnected from actual value. The money for the dividends has to come from somewhere. If you own AAPL, the dividends are funded Apple’s business activities. If you think that Apple’s business is a dead end, you would sell off your AAPL stock and move your money somewhere else. Dividends are also only a small part of the picture.