Stocks newfag here, not investing in anything yet because I realize the full extent of my ignorance, so I'm just trying to figure out the mentality and definitions of traders. What's the point of dividends? I see people here all the time talking about how dividends are the way to go when picking a stock, can anyone confirm/deny/explain?
(also future finance major desu)
Compounding interest. Passive income.
Don't major in finance. I learned this in high school, in the retard math class with all the stoners and pregnant Mexican girls. The fuck are you doing OP
Dividends are how companies pay their shareholders. All companies will eventually pay dividends/ buy back shares (same thing more or less) unless they fail. If a company is profitable but doesn’t pay a dividend it’s because they have better uses for that money (better = higher return that the company’s weighted average cost of capital). A stock is not necessarily a better (or worse) investment because it pays a dividend, only brainless think that. All that matters is the present value of all future cashflows.
Planning on majoring in Finance, going into management somewhere or maybe a financial position to learn the backside of how companies work and earn capital, then then start one of my own with a cushy job to fall back on.
What is "the present value of all future cashflows"
why major in something you clearly have no interest in?
Use google. Companies are valued by estimating what all their future profits are worth today.
And this. I don’t mean this in a rude way, but you might want to have a basic understanding of finance before you decide to major in it.
because being an entrepreneur and having zero capital/knowledge is a bad idea? look idk man I just figure majoring in entrepreneurship itself is a bad idea
and look i'm not that retarded, I understand what dividends are I just wondered why some people prefer stocks that pay them. I initially thought it's because they assume if the business is paying dividends then there's nothing worth reinvesting in, thus the company must be safe