Re: What is a share or stock of a company really mean?

From: Email Invalid (email_invalid_at_mail2world.com)
Date: 07/29/04 

Date: 29 Jul 2004 14:58:52 -0700

"Mark Mathu" <mark@mathu.com> wrote in message news:<EA6Oc.56347$vN3.12737@twister.rdc-kc.rr.com>...
> "polypheus" <polypheus@mailandnews.com> wrote in message
> news:be6f32e5.0407281826.3e213ff5@posting.google.com...
>
> > Why would anyone buy shares in the first place to "finance" the new
> > company if dividends weren't paid on shares or if capital gains were
> > somehow not available when you bought those shares?
>
>
> Why on earth would you think that dividends or capital gains would not be
> available?

Many companies don't offer dividends. As for capital gains, that would
be difficult to make "unavailable". But suppose capital gains for
stock didn't exist or weren't available somehow. I was wondering what
the utility of stock would be in that case?

Consider real estate. Many people invest in real estate because of
capital gains. But imagine somehow that capital gains were unavailbale
in real estate. But in that case, people would still buy and sell real
estate because real estate serves an obvious purpose in being used for
running a business or as a place of residence. So companies and
individuals would still buy real estate for its underlying utility
even without capital gains.

So if there were no capital gains, would there still be some
underlying utility of buying stock?

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