High dividends not always a good thing
Andy Mukherjee Mar 4, 2012 Companies pay dividends for the same reason that peacocks unfurl their feathers: to get ahead in the mating game. By handing out cash to investors at regular intervals, a company woos shareholders who may have reasons to be sceptical of its financial strength. Like all serenades, paying out of dividends, too, has its special rules. First, a dividend should be an easy-to-remember, round number. Second, it should either rise or remain the same from year to year, but it must never be reduced. Investors dump shares of a company that
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