Like, Company A posts 5 Billion in profits. But if they post 4.9 billion in profits next year it’s a serious failing on the company’s part, so they layoff 20% of their employees to ensure profits. Am I reading this wrong?
In: Economics
At some point, many companies get so large that they shift to payout out dividends with their revenue instead of focusing on growth. Some large caps like Coca-Cola(KO) are a good example of this, they are already a global presence, they don’t have anywhere left to expand to, so they pay out most of their profits(>75%) to their shareholders instead of making new factories or expanding their market.
They also had a peak revenue/net income/EPS in 2011/2012 but their stock is nearly 3x the price is was then.
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