Question

Pat starts a business called ValueCentral, the concept takes off, and the company has an IPO and goes public. The company is growing very rapidly and trying to keep up with customer demand. What type of dividend is this company likely to pay its stockholders

Answer 1

Answer:

Very small or no dividend

Explanation

Dividend is simply the distribution of profit made by company, firm e.t.c to its shareholders. Most startup company do pay little dividend due to the profit outcome but others do not. It is necessary to pay dividend to shareholders as it shows your devotion and commitment to look after and be in one mind with investors.

most companies that are just startups do not pay a dividend mostly during the early stage of growth. The revenue derived from startup is used to grow and develop the company and not to share with shareholders but sharing little is not bad a all.