Financial managers: tend to prefer cutting dividends every time quarterly earnings decline.
A dividend is a payment made by a corporation to its shareholders that is decided by the board of directors. Dividend payments are frequently made quarterly and might take the form of cash payments or stock reinvestments. The dividend yield, which is the dividend per share, is stated as a percentage of the share price of a corporation, for example, 2.5%. As compensation for their investment in a firm, shareholders frequently anticipate dividend payments.
When a corporation declares a high-value dividend, it may be a sign that business is booming and healthy profits have been made. However, it can also mean that the business lacks the right projects to provide higher profits in the future. As a result, it is using its cash to pay shareholders rather than investing it in further expansion.
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