When you hold the stock and the price appreciates, you will benefit it when you sell your shares and REALIZE the gain. Until then earnings are unrealized, and a benefit to unrealized gains are that they are not taxable until you sell. Dividends are taxed when paid, so different tax consequences factor into everything as well.
well, lets look an example or two, shall we?
Google started off at 10 / share no dividend. It is well over 500 now and has split once, the equivalent of 1000/share. no dividend.
Proctor and Gamble pays a dividend and generally increases it every year.
So either way, you benefit. but with a growth company, no dividend, you benefit more.
the tax is 15% to 20% on the capital gain after holding a stock for one year or more.
the tax is 15% to 20% on the dividends.
By selling it to someone else at a higher price.
Take the example of Dutch Tulip bulbs. Obviously tulip bulbs can NEVER pay dividends yet the price rose from next to nothing to that of an average man's annual salary. Then the bubble burst!
Oh, gee, the difference in capital gain when they sell?
Checkout this stock calculator fiis.in/stock-eligibility-calculator/
Theoretically, if a company claims outright it will NEVER ever pay dividends, what is the incentive of owning its stock? If the company never pays investors a % of its growth even when it gets to astronomical proportions, is there any reason to own its stock? Do investors benefit from the stock in any other way?
