Bodyswerve plc has experienced significant performance gains over previous years and there is no reason to expect any different in the future. The firm has engaged with a potential investor to purchase its shares in the open market. However, the investor has argued that a Bodyswerve investment is not good value for money because the firm has never paid a dividend and their preference is to choose equities that only pay dividends.

(a) Does the investor’s argument make sense? Explain.

(b) What argument should be used to convince the investor that Bodyswerve equity is the investment for her?

(c) What counter-arguments could be made?