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