Some firms (type 1) increase dividends because of higher earnings, while other firms (type 2) increase dividends because they have large cash balances. As a bondholder in a firm, would you differentiate between the two in terms of the impact on your holdings? Provide a short reasoning addressing each type of firm

Answer rating: 100% (QA)

Yes as a bondholder the reason behind a firms dividend increase can impact your holdings in two ways ... View the full answer