El papel de los dividendos | 5/17 | UPV

Title: The Role of Dividends Auto-description: This video explains the impact of dividend reinvestment on the return of a long-term investment portfolio. Two scenarios are presented: reinvesting dividends in the purchase of new shares or not reinvesting them. An investment of €10,000 with an annual dividend yield of 5% is used as an example, comparing the return on capital over 20 years in both cases. The first case, without reinvestment, shows that the capital would double, reaching €20,000 after 20 years. On the other hand, reinvesting dividends results in a capital of €26,500, significantly exceeding the return without reinvestment. Reinvestment also offers tax advantages, as the shares received are not initially subject to withholding tax, unlike cash dividends, where a withholding tax is applied. The historical importance of dividend yield is highlighted and it is shown that over long periods, the difference in returns from reinvesting dividends versus not reinvesting them is significant. It is also advisable to receive dividends directly in stocks to avoid tax withholdings and to diversify investments, including companies that offer different levels of dividend yield. Author: Guijarro Martínez Francisco Course: This video is video 5/17 of the MOOC: Introduction to Stock Market Investment | Polytechnic University of Valencia (UPV).    • MOOC: Introducción a la Inversión Bursátil...   Register at: https://upvx.es/courses/course-v1:edx... Polytechnic University of Valencia (UPV): https://www.upv.es More videos at:    / valenciaupv   Access our MOOCs: https://upvx.es #dow #jones #taxation #economy