Question

Johnny Depp has just invested in a group of companies that are young and that he feels are going to have a large increase in price of the next few years. Since of these companies are young and reinvesting much of their earnings back in the company none of these companies are paying a dividend at the current time. Which investment factor is Johnny focusing on

Answer 1

Answer: c. Investment Growth

Explanation:

Johnny Depp is most likely focusing growing his investment as opposed to receiving a stable dividend.

The company described is Growth company. These companies want to grow and so they reinvest their profits into expanding their capacity. This will lead to their value increasing as time goes on.

The investment that Johnny Depp made will therefore keep increasing in value as the company does so which will mean that the profit Mr. Depp makes will be from his investment increasing in value (capital gain).