Assuming share prices rise along with those higher corporate earnings, stock investors will enjoy inflation - beating gains.
Not exact matches
If you hold a stock in a non-registered account, you'll likely pay tax on dividends — even if they are reinvested in additional
shares — and you'll also pay capital gains tax when you ultimately sell the
shares (
assuming they
rose in
price).
Sell Target When I initially took a position I
assumed that the company would put itself in order financially (cut losses) and buy in a significant amount of the outstanding
shares within a couple of years, and the
share price would
rise to around book value.
This 6 % expected return
assumes that the company's
share price keeps pace with the
rise in the dividend payment.
When the
share price falls, the yield
rises (
assuming dividend payments remain the same), enabling investors who reinvest their dividends to buy more
shares that have the potential to grow as market performance improves.