13 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

Common stock in a company represents ownership rights in that company. If you own stock of a company you become a shareholder with certain rights. Among other things, you are allowed to vote during ...
Financial Freedom's user avatar
9 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

The corporate investment bank that facilitates taking the company public is in the best position to get "free money". (Well, it's free in exchange for services rendered, but I digress...) ...
Ian's user avatar
  • 191
3 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

Is X essentially receiving free money By Initially selling the stocks to the shareholders? No, because X does not get the money; his company does. By making the company public, X is no longer ...
PyRulez's user avatar
  • 559
3 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

X only gets "free money" if their share of the company is worth more that it was initially sold for. Say X's company (Y) is worth V and X owns N shares. X's private shares are worth V/N per ...
D Stanley's user avatar
  • 131k
3 votes
Accepted

Alibaba shares price discrepancy in US and Hong Kong

The ADR share represents 8 shares of the original share, which is (by chance) currently around the HKD/USD conversion rate, so their numbers look similar. As of now, one Alibaba share is worth 77.25 ...
Solarflare's user avatar
  • 2,313
2 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

Yes in essence they are, but with strings attached An owner could try to convert investments into private profit. But most jurisdictions would consider this fraud. In essence the owner is promising ...
Falco's user avatar
  • 627
1 vote

Should I include negative values to calculate the average PE ratio?

It makes no sense to average together positive and negative P/E ratios. As earnings decrease smoothly, the P/E ratio approaches positive infinity, then experiences a discontinuity (jump) to negative ...
Ben Voigt's user avatar
  • 6,788
1 vote

Why should I use ROIC instead of P/E given that that is the price I'm paying to buy stock?

Since these two metrics are closely related in the sense that a high ROIC will tend to mean a high P/E (and conversely) you cannot really consider one in preference to the other. Also, keep in mind ...
not-nick's user avatar
  • 6,400
1 vote

Why should I use ROIC instead of P/E given that that is the price I'm paying to buy stock?

ROIC is a measure of how well a company has used its capital to generate returns. It can be used to compare the efficiency or effectiveness of similar companies, or to see if a company is making ...
D Stanley's user avatar
  • 131k

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