We've learned how to use dividends to value stock. However, many firms do not pay dividends....
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We've learned how to use dividends to value stock. However, many firms do not pay dividends. For example, on Tesla's website it says "Tesla has never declared dividends on our common stock. We [...] do not anticipate paying any cash dividends in the foreseeable future." Tesla's shares are trading at about $791 per share (10/11/2021), a 2-year gain of about 1120%. How is it possible? We've learned how to use dividends to value stock. However, many firms do not pay dividends. For example, on Tesla's website it says "Tesla has never declared dividends on our common stock. We [...] do not anticipate paying any cash dividends in the foreseeable future." Tesla's shares are trading at about $791 per share (10/11/2021), a 2-year gain of about 1120%. How is it possible?
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A company may gain by way of either dividend or rise in price of the share and therefore if ... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
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