Over the long term, shareholder returns reflect a fundamental relationship between economic growth, corporate profits, and returns on capital—that is, stock-price appreciation combined with shareholder payback has resulted in about 6 percent real total returns to shareholders. This reflects a rough equilibrium between expectations and returns that has held true, over the long term, in spite of 100 years of war and peace, industrialization, major demographic shifts, and technological advances. In fact, even with relatively extreme assumptions about long-term earnings growth, it is difficult to foresee real long-term expected shareholder returns of less than about 5 percent.

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