Question for the **** people here:
What is the incentive for anyone to buy securities of public-traded companies if they're not expecting to ever receive any dividend or share of profits made by the companies?
This is a 5-grade question by the way.
What is the incentive for anyone to buy securities of public-traded companies if they're not expecting to ever receive any dividend or share of profits made by the companies?
This is a 5-grade question by the way.
I'll let Investopedia answer your question. Since you won't listen to us **** people...
http://www.investopedia.com/articles/02/041702.asp
There are a number of ways in which a company can return wealth to its shareholders. Although stock price appreciation and dividends are the two most common ways of doing this, there are other useful, and often overlooked, ways for companies to share their wealth with investors. In this article, we will look at one of those overlooked methods: share buybacks. We'll go through the mechanics of a share buyback and what it means for investors.
The Meaning of Buybacks
A stock buyback, also known as a "share repurchase", is a company's buying back its shares from the marketplace. You can think of a buyback as a company investing in itself, or using its cash to buy its own shares. The idea is simple: because a company can't act as its own shareholder, repurchased shares are absorbed by the company, and the number of outstanding shares on the market is reduced. When this happens, the relative ownership stake of each investor increases because there are fewer shares, or claims, on the earnings of the company.
This in turn will also increase the ownership stake of ICN holders but for holders the only way to get profit is to sell ICN.They can liquidate their holding in market buy selling ICN but that way they will lose ICN.
While in dividend system, they will get profit on their holding without losing them.
http://www.investopedia.com/articles/active-trading/073015/dividend-versus-buyback-which-better.asp
