People generally buy stock because they expect the price of the stock to rise.
The main force that determines stock price is, as far as I can tell, the force of the market, i.e. supply and demand for the stock like any other good.
But stock prices often fall when, say, company profits fall, and rise when company profits rise. Are these price changes driven entirely by expected changes in dividends? This seems implausible to me, if only because some stocks don't pay dividends.
Am I missing something? What, other than dividends, tangibly links stock price to corporate performance? Does stock ownership imply any specific obligation on the part of the company to distribute profit, or is it just an implicit understanding?
I understand that the market is in an equilibrium where people buy stock because they think other people will buy stock. I'm wondering about actual incentives other than belief about what other people believe.