A:

Berkshire Hathaway (BRK-A, BRK-B) does not pay a dividend because its chairman and CEO, Warren Buffett, believes it is more beneficial to allocate the company's earnings in other ways. In particular, Buffett prefers to reinvest profits in things that allow his company to improve its efficiency, expand its reach, create new products and services as well as improve existing ones, and further separate itself from competitors. Buffett, like many business leaders, feels that investing back into his business provides more long-term value to shareholders than paying them directly because the company's financial success rewards shareholders with higher stock values. Additionally, Berkshire Hathaway maintains an aggressive stock buyback policy that puts cash directly into shareholders' pockets.

Despite the company having billions of dollars of cash on hand, the prospect of a Berkshire Hathaway dividend is dim as long as Buffett is in charge. The company has paid only one dividend during his reign, in 1967, and Buffett later joked he must have been in the bathroom when the decision was made. Nevertheless, statistics give credence to Buffett's stance that using profits to buttress the company's financial position results in greater wealth for shareholders than paying dividends. Berkshire Hathaway's stock price increased by almost 700,000% between 1964 and 2014 and specifically experienced a recent uptick in the months of November and December 2016. Someone who invested $1,000 in the company's stock in 1980 is a millionaire in 2016.

As for the stock buybacks, these benefit investors in two ways—they allow them to cash in some or all of their company stock at a premium they would not receive on the open market. The remaining shareholders also increase their ownership stake as stock buybacks reduce the total number of outstanding shares.

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