Sam says that stocks that do not pay dividends are best and Kelly believes that stocks with high dividend payouts are best. Explain why they are both correct.
Sam and Kelly are having a disagreement. Sam says that stocks that do not pay dividends are best and Kelly believes that stocks with high dividend payouts are best. Explain why they are both correct.
There can be huge positives by investing into stocks without dividends as well. Firms that do not pay dividends on stocks are usually reinvesting the cash that may some way or another go to dividend payments into the development and total growth of the firm. This implies, after some time, their share costs are probably going to appreciate in terms of the value. At the point when it comes time for the investor to sell their shares, they may well observe a higher return for their investment than they would have accomplished from investing into a stock that is paying dividend.
Investments made with stocks with dividends are considered as valuable to the investors. Because investors can get a standard pay from their equity investment, whereas proceeding to hold the stock to profit further from appreciation in the price of share. Dividends are cash that we presently have with us and the stocks tend to increase and decrease in the market.
Step by step
Solved in 3 steps
