And dividend payments are represented in the stock price graph as a reduction of the price (on the ex-dividend date), making the return to investors actually higher than what is shown in the graph.
When a share market lacks dividend imputation, few companies pay a dividend, and rather resort to "share buy backs". Shareholders then are encouraged to aim for profit from capital gains (share price rising), rather than passive investment (collecting dividends). Implementing dividend imputation will neutralize this effect.
Sometimes, but without dividend imputation you really can't tell, both shareholders & employees who are affected by these compensation plans based on stock price, are incentivised to pay out profits via share buybacks as opposed to dividends.
In Australia, where there is dividend imputation, you still sometimes see companies do share buy backs, (that could be driven by compensation), but mostly you see many large established companies paying out 50% or more of their profits as dividends.
Here is a very large (in Australian terms) company that pay out around $1.3 of dividend a year and whose price is $13.90. http://au.finance.yahoo.com/q?s=qbe.ax&ql=1 (I'm not advocating anyone to buy it. It is an insurance company very exposed to the US economy & also recent natural disasters. )