Dividends and Buybacks Now Larger Than Total Reported Earnings for Entire S&P500

Re:Dividends and Buybacks Now Larger Than Total Reported Ear... by y96V89C668e7Q74 on Friday May 24, 2019 @02:44PM (#20004201)

I recall learning this too. I never heard that prices shouldn't go up. Maybe the above person meant that the total valuation shouldn't go up? If so, that logic does check out.

[ Parent | on HN ]

Re:Dividends and Buybacks Now Larger Than Total Reported Ear... by formercoder on Friday May 24, 2019 @02:49PM (#20004258)

I think we’re talking about Miller-Modigliani [1] which says that enterprise value should not change as capital structure changes. However it presumes many untrue aspects of the world in order to make this claim.

[1] https://en.m.wikipedia.org/wiki/Modigliani–Miller_theorem

[ Parent | on HN ]