Hi Max. You made a fantastic point in your posting! When it comes to dividends, history...

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Accounting

Hi Max. You made a fantastic point in your posting! When itcomes to dividends, history is often a good indicator. If a companyhas never paid dividends in the past, then it would not bereasonable for an investor to have the expectation for dividends inthe current year. While it may be possible, it certainly would notbe probable. On the flip side, if a company has paid a steadydividend every quarter for the past ten years, then it would befairly reasonable to expect some sort of dividend in the future.Class, if a company with a history of paying dividends decided tosuddenly stop paying those dividends and reinvest the monies in thebusiness instead, how do you think stockholders might react?

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Stockholders reaction depends primarly on Informational perfection of the market If the informetrics regarding return on investment from prospective investments made in business risk perception of management in new investments are made available to investors before taking a decision stockholders can react in most See Answer

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Hi Max. You made a fantastic point in your posting! When itcomes to dividends, history is often a good indicator. If a companyhas never paid dividends in the past, then it would not bereasonable for an investor to have the expectation for dividends inthe current year. While it may be possible, it certainly would notbe probable. On the flip side, if a company has paid a steadydividend every quarter for the past ten years, then it would befairly reasonable to expect some sort of dividend in the future.Class, if a company with a history of paying dividends decided tosuddenly stop paying those dividends and reinvest the monies in thebusiness instead, how do you think stockholders might react?