Is it really meaningless to ex dividend rights?

Mondo Finance Updated on 2024-01-19

Usually everyone thinks that dividends have to be ex-rights, which is meaningless, and I will give you a simple example that may be easier to understand, and it can better explain why buying ** is buying a company.

One day, an old man was ready to pay 100 yuan **, an apple tree with 10 ripe fruits in the orchard, ** is still taken care of by him, but he has to charge 1 apple as a reward every year, and 1 apple is currently sold for 1 yuan in the market.

You bought the tree and the fruit for 100 yuan, and immediately picked the apple and sold it for 10 yuan, at this time the old man didn't want to sell it, and the old man was definitely only willing to buy it back for 90 yuan, and the 10 yuan fruit money has been turned into cash into your pocket, which is why it is necessary to remove the right, which is a point in time concept and belongs to the fairness of the rules.

The old man only wants to buy it back for 90 yuan, but is it really cost-effective for you to sell it for 90 yuan?It seems that you didn't lose money by selling it back to the old man for 90 yuan, but what you lost was an apple tree that will bear fruit again next year.

If the apple tree can bear 10 fruits every year, it will pay back in 11 years if you count the remuneration paid to the old man, and then it will be pure money.

Thinking further, if you count inflation, if the fruit rises to 5 yuan a piece, what will your rate of return look like?A tree may bear 20 apples in a good year, so would you like to sell it for 90 yuan?At this point, it is estimated at 200 before you consider selling.

If no one is willing to pay more than 90 yuan to buy apple trees, they should be happy, which means that you share your apples, you can buy more apple trees after you sell them, and your career will become bigger and bigger.

At this point, you should be able to see the significance of dividends, dividends will not affect your equity, **There are only two kinds of income, buy low and sell high and dividends, dividends are only one of them, dividends will not reduce the value of your company. It's like running a company by yourself and dividing all the profits, does the value of your company decrease?

It's just that he is not as intuitive as buying low and selling high, which makes you feel that you are making money. The extreme point is explained, if a company has a market value of 1 billion and can earn 1 billion a year, and he takes out 900 million to pay dividends, according to the ex-rights rule, his market value becomes 100 million, will you buy it brainlessly at this time?Because he can still earn 1 billion next year.

If you agree that the stock price cannot be **, then the dividend is the opposite, it can be calculated and **, but no one wants to get rich slowly, wait for the apple to mature, and get rich by the apple.

Pay attention to it, and don't get lost ...... investment

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