Comments on: Breakthrough Idea? Do not pay dividends! - Harvard Business School http://www.capital-flow-watch.net/2007/02/03/harvards-breakthrough-idea-dont-pay-dividends/ Conservative economic commentary from the top-down Fri, 23 Jul 2010 19:34:57 -0400 http://wordpress.org/?v=2.9.1 hourly 1 By: John Schroyhttp://www.capital-flow-watch.net/2007/02/03/harvards-breakthrough-idea-dont-pay-dividends/#comment-148 John Schroy Fri, 30 Jan 2009 18:10:48 +0000 http://capital-flow-analysis.com/capital-flow-watch/harvards-breakthrough-idea-dont-pay-dividends.html#comment-148 <p>Obviously, in these hard times, a company would be wiser to conserve cash than pay dividends, if that is what is required for survival.</p><p>However, if a company has a financial position that will justify dividend payments, continued dividends would be in investors' interests. Cash dividends also help break the fall in stock prices, if continued payment is likely.</p><p>The suggestion in the HBS article in 2007 was that dividend payments should come last, not first, even if management doesn't have a good idea of what to do with the money. I think that this was a bad idea then and is still a bad idea.</p> Obviously, in these hard times, a company would be wiser to conserve cash than pay dividends, if that is what is required for survival.

However, if a company has a financial position that will justify dividend payments, continued dividends would be in investors’ interests. Cash dividends also help break the fall in stock prices, if continued payment is likely.

The suggestion in the HBS article in 2007 was that dividend payments should come last, not first, even if management doesn’t have a good idea of what to do with the money. I think that this was a bad idea then and is still a bad idea.

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