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Explain company creates value for its shareholders in a year

Is this true that a company creates value for its shareholders in a year when this distributes dividends or when the quotation of the shares increases?

E

Expert

Verified

No. A company creates value to shareholders if the return they find is higher than required return. To create value, it is essential that the return on dividends plus the return because of price increases be superior to the required return; this is not enough if this is a positive number.

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