Tax exemptions
Question: I don’t think that’s true. Existing companies require capital to grow >>their businesses. Investing in these companies keeps their share price >>up, which allows them greater access to capital.
>That’s a new idea in economics: people buy more because the price is >higher?
For a secondary offering of a momentum stock, yes.
Answer: Otherwise known as “taking a company private”. It happens all the time.
This is also why stock prices can still be rational even without payment of cash dividends.
If everybody somehow believed the sky were falling and because microsoft has no dividends and no plans for the future the net present value is zero and they all SELL!!!!!, then surely warren buffet wouldn’t mind buying a company which made gigabucks in profits for a few dollars.
: Under these conditions, no bank would provide new money.
Surely incorrect. Many private companies have loans. They are just as real as public ones. For a long time, the ambiguous term “the rich” has been tossed about in the capital gains arena. People overlook that stocks and mutual funds power employee stock purchase plans, 401K plans, and the retirement funds of yesterday. Capital gains cover money made in savings accounts and home sales. The stock market is not a stronghold for 1% of the population. Rather, it is a mechanism for the flow of money.
Related Posts
Filed under: School Loan
Leave a Comment
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
TrackBack URL | RSS feed for comments on this post.