would it ever by rational for a firm to borrow money in order to pay dividends?

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would it ever by rational for a firm to borrow money in order to pay dividends?

2007-08-19 17:19:12 · 2 answers · asked by dani p 1 in Business & Finance ➔ Personal Finance

2 answers

Dividends are usually paid from income. If there is no income after expenses there usually aren't dividends.

2007-08-19 17:23:41 · answer #1 · answered by zydecojudd 3 · 0⤊ 0⤋

It has happened, it will happen. Keeps your price up. I beleave GM did it during the meltdown a couple of years ago.

Not sure but some buybacks may have been done with borrowed cash.

2007-08-19 17:30:53 · answer #2 · answered by Stand-up philosopher. It's good to be the King 7 · 0⤊ 0⤋