Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
Martin Hash wrote:Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
Share price should theoretically respond to an increase in cash on hand, in some fashion, yes. That’s a large part of Apples value. They aren’t innovating anymore, but they’ve got a few billion in cash, waiting to be dished out.
I’d like to own stock in any company that ever gave 100% dividends though.
Martin Hash wrote:Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
Share price should theoretically respond to an increase in cash on hand, in some fashion, yes. That’s a large part of Apples value. They aren’t innovating anymore, but they’ve got a few billion in cash, waiting to be dished out.
I’d like to own stock in any company that ever gave 100% dividends though.
Forcing companies to pay full dividends is part of the Hash Plan for Most Liberty to Most People. Companies primarily hold cash to cheat taxes and minority stockholders. There's no legitimate reason for a company to retain earnings: that's what banks and investors are for.
Martin Hash wrote:Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
Share price should theoretically respond to an increase in cash on hand, in some fashion, yes. That’s a large part of Apples value. They aren’t innovating anymore, but they’ve got a few billion in cash, waiting to be dished out.
I’d like to own stock in any company that ever gave 100% dividends though.
Forcing companies to pay full dividends is part of the Hash Plan for Most Liberty to Most People. Companies primarily hold cash to cheat taxes and minority stockholders. There's no legitimate reason for a company to retain earnings: that's what banks and investors are for.
They keep most of it for re-investment/buybacks/debt. If they gave it all back, the business would never grow.
I like your plan, but it would never get a vote in Congress. You might be able to mandate 75% or so, that would be nice.
GrumpyCatFace wrote:They keep most of it for re-investment/buybacks/debt. If they gave it all back, the business would never grow.
Like I said, that's what banks and investors are for. The vast majority of businesses are already passthrough; only the tax/shareholder-cheating ones are C corps.
p.s. A business is a legal fiction and money is imaginary.
