Re: "is a good deal for as long as the dividends continue" - Saab General Bulletin Board - Saabnet.com
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I don't know the complete history, but I believe GM has been providing dividends continuously for many years. They did reduce the amount a few years ago. One thing you're forgetting is that dividends make a stock more attractive to an investor. If you compare 7.5% return per year with the given level of risk, it's pretty good. The share price could go up, or it go down, but if you buy shares right before the divident pay-out effective date, you could make some decent money. I don't think GM will go under. If anything, they will merge or be bought out and that may increase the share price.
From what I learned in Corporate Finance class during my MBA program, the value of a share of stock is based on the present value of all future dividends. If GM were to get rid of their dividends, that would lower their share price which isn't a good thing either. Perhaps "sound fiscal policy" isn't always the best thing to follow.
Posts in this Thread:
- OT: Buying GM stock???, MI-Roger
, Tue, 24 Jun 2008 09:19:54- all 3 US will likely declare bankruptcy...., Pete
, Tue, 24 Jun 2008 20:07:59 - Re: OT: Buying GM stock, BobS, Tue, 24 Jun 2008 11:23:12
- For dividends, it's a good buy, Caarma
, Tue, 24 Jun 2008 11:11:08 - Only if gas $ falls n/m, DivrDon
, Tue, 24 Jun 2008 10:56:29
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