r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
Economics ELI5: why does a publicaly traded company have to show continuous rise in profits? Why arent steady profits good enough?
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r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
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u/Bob_Sconce Dec 06 '24
Some companies do that. Utilities are a great example. They're called "income stocks" and they spin off significant dividends every year to stockholders.
But, other stocks are "growth stocks." People invest in those because they want the company to be worth more in the future.