[lbo-talk] stock valuation without dividends

[Jim Devine]

>Something I've never been able to figure out is how
stocks prices are supposed to be related to the
performance of the company.  The only explanation I've
heard that makes any sense is that stocks are
essentially claims on future dividends and hence their
value is the discounted value of those future
dividends.  It seems to me that there are several
problems with this explanation.
> What am I missing?


> -Alex<

Why does gold have a positive value, even though it doesn't pay
dividends? A zero-dividend stock has positive value simply because
people think it will be more valuable in the future, i.e., pay with
capital gains.
-- 
Jim Devine
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.) -- Karl, paraphrasing Dante.