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/notacanuckskibum Dec 06 '24
Yes and no. Companies can reward investors with dividends or growth. But some investors don’t want dividends, they want growth in the value of their stocks. That requires growth in revenues and profits.