Market value of shares
Hi, I am reading corporate finance and have a question on the market price for a corporation's share. Suppose a Company does not pay dividend but grows at over 15% YoY. Typically this will increase the share price in the market as investors are ready to pay premium for the growth. Shareholders invest in a company's share based on what the company can return considering the opportunity cost. If the company never pays dividends to shareholders, then why does the price of share increase based on the company's revenue growth.
Why would an investor decide to buy into a company that grows but not return anything back as dividend.
Thanks and regards,
R