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Technology Stocks : LSI Corporation
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To: sea_biscuit who wrote (17896)4/10/1999 2:49:00 AM
From: Jock Hutchinson  Read Replies (1) of 25814
 
Dipy: Your comment please on this gentleman's perspective on dividends. By the way, Chuzz is clearly the brightest member of the DELL thread, and he has for the past two years been the most prescient and rationally ardent of all DELL thread members--to the tune of an twelve bagger in two years. Now that's investing.

Message 8775332

the usual rationalization for dividends is contained in what is called the residual dividend theory. Simply stated, it contends that when a company can no longer invest its funds at an expected return greater than its average cost of capital it pays the residual to the shareholders in the form of dividends. This is consistent with the idea of maximizing shareholder wealth. Remember too, that share repurchase is a tax-advantaged dividend in disguise.

Of course dividends are important ultimately, but they are a negative in growth companies because they signal decreasing opportunities for growth.

Clearly his perspectives on dividends is directly at odds with yours.
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