Ultimately, if a company does not do that at all (in its lifetime) then it does not provide any benefit to it's shareholders except the share price gains - and for a company which starts from 0 and ends at 0, share price gains are essentially zero sum.
Corporations rarely either start with a stock price of $0/share, and only end at $0/share when they end insolvent, which, while many end that, isn't the way all end.
Obviously I was oversimplifying. However, my claim still holds: if companies were not paying dividends at all, then there'd be no stockmarket and no investing.
However, my claim still holds: if companies were not paying dividends at all, then there'd be no stockmarket and no investing.
Sure there would. The main theoretical support of the value of stock as a marketable asset is the claim on the corporations assets at dissolution and the hope that when the corporation is dissolved, your share will be worth more than when you bought it; dividends are just a means of effecting a partial dissolution.
If corporations never paid dividends, were never acquired for cash, and never otherwise dissolved except through insolvency which returned nothing to shareholders, then your argument with regard to the stock market might hold some weight (there'd still be a potential for a stock market if stock existed, but without an effective claim on assets, its hard to see how it would never suffice for raising capital in the first place.)
But there'd still be investing, even in businesses; it'd just all take the form of bonds.
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Corporations rarely either start with a stock price of $0/share, and only end at $0/share when they end insolvent, which, while many end that, isn't the way all end.
Obviously I was oversimplifying. However, my claim still holds: if companies were not paying dividends at all, then there'd be no stockmarket and no investing.
Sure there would. The main theoretical support of the value of stock as a marketable asset is the claim on the corporations assets at dissolution and the hope that when the corporation is dissolved, your share will be worth more than when you bought it; dividends are just a means of effecting a partial dissolution.
If corporations never paid dividends, were never acquired for cash, and never otherwise dissolved except through insolvency which returned nothing to shareholders, then your argument with regard to the stock market might hold some weight (there'd still be a potential for a stock market if stock existed, but without an effective claim on assets, its hard to see how it would never suffice for raising capital in the first place.)
But there'd still be investing, even in businesses; it'd just all take the form of bonds.