A company that pays no dividends is always a poor investment.

Question

Quizplus · Accepted Answer

Investors acquire common stock because they expect a return on their investment.This return can come in two forms: dividends and increases in stock price.Some investors prefer to buy stocks that pay little or no dividends (called a growth investment)because companies that reinvest the majority of their earnings tend to increase their future earnings potential,along with their stock price.

A Company That Pays No Dividends Is Always a Poor