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All non-dividend paying stocks are zero-coupon perpetual bonds anyway. Nothing new about it
by redandblack 3y ago
All non-dividend paying stocks are zero-coupon perpetual bonds anyway. Nothing new about it
- vikramkr 3y agoStocks are distinct from bonds, they're an ownership stake in a business so dividends are only a small component of their value. Share buybacks, liquidity events like exits, voting rights, etc all feed into value. Stock buybacks in particular can have tax advantages over dividends leading to companies like apple favoring them as a way of distributing value to shareholders. And the the terms of a stock aren't set at stock issuance, since they represent shares in a business they can go from dividend paying to not dividend paying and back.
- imtringued 3y agoIf you have a company that is ideologically against paying dividends or doing stock buybacks and instead buys gold with its profits, its value would still go up as if it did stock buybacks because share owners also own a fraction of the gold. Now imagine a real business like Amazon reinvesting, the investments raise the value of the company's assets.