"Why would any company take a profit when it can invest in it’s own future "
1) Because it's almost never the opportunity. 'Super High Growth' over a couple decades is a rare thing.
Imagine if AMZN had not invented AWS? It would be a different story.
2) The term you are looking for is 'Cost of Capitol'. Which varies between various parties for different situations.
If ABC Corp. can't yeild returns past a threshold, investors will want it back to do elsewhere.
Think another way:
If you had $1M to invest, what are the odds that it makes more sense to invest it in your own business vs. any other business?
Why would amazing 'Bet Everything' on AMZN instead of any number of other companies?
If a company is making decent profits, and a lot of powerful companies do, then it may be difficult for them to find other ways to get the same return.
1) Because it's almost never the opportunity. 'Super High Growth' over a couple decades is a rare thing.
Imagine if AMZN had not invented AWS? It would be a different story.
2) The term you are looking for is 'Cost of Capitol'. Which varies between various parties for different situations.
If ABC Corp. can't yeild returns past a threshold, investors will want it back to do elsewhere.
Think another way:
If you had $1M to invest, what are the odds that it makes more sense to invest it in your own business vs. any other business?
Why would amazing 'Bet Everything' on AMZN instead of any number of other companies?
If a company is making decent profits, and a lot of powerful companies do, then it may be difficult for them to find other ways to get the same return.