If the retained funds are applied successfully for investment in new assets or to expand the business, this should increase, or at least maintain, profitability so that there should be a possibility of dividends being paid in the future. Similarly, if funds are used to pay off debt that also should lead to the prospect of future dividends.

In this situation, where a return can be expected, but not for a period of time, the prudent purchaser would wish to discount the expected dividend yield to reflect that delay (see ¶530-050).

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