You are correct about the empirical facts (there exist some companies don't currently pay dividends), but theory is needed to understand that if those company's never paid dividends, they would be worthless.
The fundamental principal is that of the transversality condition, also called the "no ponzi" condition, which states that assets must eventually deliver. If a company pays no dividends forever then the value of its stock is only based on what people are willing to pay in the future, forming a self-reinforcing ponzi-like system. It is generally assumed (I can think of many good reasons for this, like the finiteness of the universe) that such violations of the transversality condition don't occur.
Therefore the value of a share is the expected value of all future dividends. I suspect you also didn't read my post carefully and missed my qualification of "dividend-like" things. E.g. a company might start small, grow, stagnate and be bought by a private equity firm and split into parts that are sold off. At that point, the company has effectively delivered dividends to the private equity firm.
>With all respect, do you really want to be pontificating about something you know nothing about?
Your smugness is unwarranted and reflects badly on your character. I suggest you read some books on economics and try to be a better person.
The fundamental principal is that of the transversality condition, also called the "no ponzi" condition, which states that assets must eventually deliver. If a company pays no dividends forever then the value of its stock is only based on what people are willing to pay in the future, forming a self-reinforcing ponzi-like system. It is generally assumed (I can think of many good reasons for this, like the finiteness of the universe) that such violations of the transversality condition don't occur.
Therefore the value of a share is the expected value of all future dividends. I suspect you also didn't read my post carefully and missed my qualification of "dividend-like" things. E.g. a company might start small, grow, stagnate and be bought by a private equity firm and split into parts that are sold off. At that point, the company has effectively delivered dividends to the private equity firm.
>With all respect, do you really want to be pontificating about something you know nothing about?
Your smugness is unwarranted and reflects badly on your character. I suggest you read some books on economics and try to be a better person.