Does paying dividends enhance the value of a company? Some financial experts caution companies to look long and hard before beginning to pay dividends. They believe that committing yourself to a regular dividend curtails financial flexibility and reduces debt capacity. Dividends might also signal that the company doesn't have good growth opportunities in which to invest its excess cash. Others counter that dividends can help a company's stock by making it less volatile. Standard & Poor's data supports this; typically, dividend-paying stocks in the S&P 500 outperform non-payers. What do you think? Discuss.

Answer rating: 100% (QA)

1 Enhanced perceived value Paying dividends could enhance the perceived value of a company as it sen... View the full answer