e., reward and
punish justly. Capitalism generate just deserts. Market failures - for
instance, in the provision of public goods - should be tackled by
governments. But a just distribution of income and wealth does not
constitute a market failure and, therefore, should not be tampered with.
The Myth of the Earnings Yield
By: Dr. Sam Vaknin
Also published by United Press International (UPI)
Also Read:
The Friendly Trend
Models of Stock Valuation
Portfolio Management Theory and Technical Analysis Lecture Notes
In American novels, well into the 1950's, one finds protagonists using
the future stream of dividends emanating from their share holdings to
send their kids to college or as collateral. Yet, dividends seemed to
have gone the way of the hoolah hoop. Few companies distribute erratic
and ever-declining dividends. The vast majority don't bother. The
unfavorable tax treatment of distributed profits may have been the
cause.
The dwindling of dividends has implications which are nothing short of
revolutionary. Most of the financial theories we use to determine the
value of shares were developed in the 1950's and 1960's, when dividends
were in vogue.
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