Forum Archive Index - June 2000

["Jeremy" <jardley@electrosilk.net>]

> ----- Original Message -----
> From: Oliver Shapleski

> It also takes no notice of whether the investor is seeking capital growth
or income - I can't see the justification for requiring an 8% dividend
> yield.  Financially most analysts I think wuold agree that New Zealand
companies pay too high dividends.

Any reasonable investment must pay a dividend at least equal to the cost of
the money buying the shares.  That is directly dependant on interest rates.
8% sounds like about the average cost of money at the moment.  If you choose
a lower return then I suggest you are speculating rather than investing.

Also, In the climate that is coming, with increasing interest rates, high
dividend, soundly based companies will naturally become more valuable.

Jeremy



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