Why does a company ever pay a dividend instead of reinvesting in the business?

1 Answer

Answer :

answer:Well you actually learn about this if you take a financial accounting class. I forgot what the true answer is, but I think it’s something along the lines of sometimes primary shareholders just want to get paid, and the company can do that if they don’t have a better way to invest cash at that time. But there is a thought process involved on how much money. Apple shareholders (which should be happy their shares are worth so much) are upset b/c Apple is sitting on a huge stockpile of cash (billions), and they think some of that should be payed out. But Apple instead chooses to use that money as part of a “strategy.” Sorry I couldn’t be more specific. It’s been about 4 years since I’ve taken finance.

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