Sunday, June 5, 2016

Why would a company distribute its earnings through dividends to common stockholders?


a stockholder buy shares to get profit so if he will not get the return he can switch over to other company's share. it bad for company.

Regular dividend payments are signals that a company is healthy and profitable. Also, issuing dividends can attract investors (shareholders). Finally, a company may not distribute earnings to shareholders if it lacks profitable investment opportunities.

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