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    Long-Term Financing/ Dividend Policy and Retained Earnings

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    Why is the cash position of a company important, when deciding to create a dividend policy?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:43 pm ad1c9bdddf
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/long-term-financing-dividend-policy-retained-earnings-294776

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    The cash position of a company is an important factor when deciding to create a dividend policy. The amount of dividend paid by the company may have positive or negative information content for the stock market. Therefore, a company would like to pay more dividends to send positive signals to the market. However, the company would like to retain a substantial portion of the earnings of ...

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    This post discusses why is the cash position of a company important, when deciding to create a dividend policy.

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