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

Answer: Regular dividend payments are signals that a company is healthy and profitable. Also, issuing dividends can attract investors (shareholders). Finally, a company may distribute earnings to shareholders if it lacks profitable investment opportunities.



Category Finance Interview Questions & Answers - Exam Mode / Learning Mode
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Question: Why would a company distribute its earnings through dividends to common stockholders?
Answer:

Regular dividend payments are signals that a company is healthy and profitable. Also, issuing dividends can attract investors (shareholders). Finally, a company may distribute earnings to shareholders if it lacks profitable investment opportunities. Source: CoolInterview.com


a stokholder buy shares to get profit so if he will not get the return he can swith over to other company's share. it bad for co. Source: CoolInterview.com

Answered by: sagar gupta | Date: 11/19/2009 | Contact sagar gupta Contact sagar gupta

by issuing dividends to the shareholders increases the goodwill to the co.everyone invests the money where they earn the profits periodically Source: CoolInterview.com

Answered by: santhu | Date: 8/22/2010 | Contact santhu Contact santhu


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