Illustrates cost of its equity is zero or not
Is this true that the cost of its equity is zero, if a company does not distribute dividends?
Expert
No, this is not true that the cost of its equity is zero, if a company does not distribute dividends.
The often known as "cash flow" that is net income plus depreciation, is a flow of cash, but is this a flow to the company or to the shareholders?
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The part of the net income which is not distributed to shareholders goes to reserves (to shareholders’ equity). As dividends shows real money, reserves are real money as well. Is it true?
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