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Not paying dividends is great if you are a corporate executive with a very small stock position in the company you are running. Especially you have a monster compensation package, which is completely dependent on higher stock. In that case you probably want to save your cash in order to do stock buyback or even better a a new acquisition.
Then next year when you talk to the compensation committee you can see I no longer run a $2 billion corp, I run a $3 billion company pay me more. Plus with those extra interest payments on the loans we took out we don't have to worry about having so much cash that we are a take over target.
Somewhat seriously if you are Warren Buffett you can get way with no dividends, likewise if you are a startup or even a rapidly growing company like Google or Ebay, no dividends might make sense.
For everybody else, I am own a piece of the company, show me the money!
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