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Dividends

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1. Why does the value of a share of stock depend on dividends?

2. A large portion of stocks on the NYSE & NASDAQ don't pay dividends, but investors still buy their shares. How is this possible given above question 1?

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Dividends
1. Why does the value of a share of stock depend on dividends?

Common stock provides an expected future cash flow stream or dividends to shareholders, and a stock's value is found in the same manner as the values of other financial assets, i.e., the present value of the expected future cash flow stream. The shareholders can determine the value of the stock by using constant growth model, which require ...

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