Investing in themselves is the right thing to do from a finance perspective as long as they continue to have an overall internal rate of return greater than the

Investing in themselves is the right thing to do from a finance perspective as long as they continue to have an overall internal rate of return greater than their cost of capital (IRR > WACC) according to thatswacc.com, AMZNs Weighted avg Cost of Capital is 10.05% So until their overall growth slows down to less than 10% per year they will have less pressure to return dividends. AMZN (WACC 10.05%) net sales growth: 22% (2011-2012) vs 18% (2012-2013) AAPL (WACC 9.45%) net sales growth: 31% (2011-2012) vs 8% (2012-2013) From Wikipedia: "The WACC is the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere" "a corporation will evaluate an investment in a new [x] versus an extension of an existing [y] based on the IRR of each project. In such a case, each new capital project must produce an IRR that is higher than the company's cost of capital" For more info, see sources: http://en.wikipedia.org/wiki/Weighted_average_cost_of_capital http://en.wikipedia.org/wiki/Weighted_average_cost_of_capita... http://thatswacc.com/ http://thatswacc.com/ http://www.investopedia.com/walkthrough/corporate-finance/4/npv-irr/internal-rate-return.aspx http://www.investopedia.com/walkthrough/corporate-finance/4/...