Listen to a Business English Dialogue about A passed dividend
Walter: Hey Isabelle, have you ever heard of a passed dividend in finance?
Isabelle: Yeah, I think it’s when a company decides not to pay dividends to its shareholders, even though it has the funds to do so.
Walter: That’s correct. Companies might pass dividends to retain earnings for future investments or to strengthen their financial position.
Isabelle: Are there any consequences for shareholders when a company passes a dividend?
Walter: Well, shareholders might be disappointed if they were expecting a dividend income, and it could affect the company’s stock price.
Isabelle: So, it’s important for investors to consider a company’s dividend policy when making investment decisions?
Walter: Absolutely. A company’s dividend history and policy can provide insights into its financial health and management’s priorities.
Isabelle: Can a company resume paying dividends after passing them?
Walter: Yes, if the company’s financial situation improves, it can decide to resume paying dividends in the future.
Isabelle: Thanks for explaining that, Walter. Passed dividends seem like an important aspect for investors to understand.
Walter: No problem, Isabelle. It’s essential for investors to stay informed about all aspects of a company’s financial performance.