Comments on: Harvard’s Breakthrough Idea: Don’t Pay Dividends!

by: John Schroy

Fri, 30 Jan 2009 18:10:48 +0000

Obviously, in these hard times, a company would be wiser to conserve cash than pay dividends, if that is what is required for survival.

However, if a company has a financial position that will justify dividend payments, continued dividends would be in investors' interests. Cash dividends also help break the fall in stock prices, if continued payment is likely.

The suggestion in the HBS article in 2007 was that dividend payments should come last, not first, even if management doesn't have a good idea of what to do with the money. I think that this was a bad idea then and is still a bad idea.

by: Ed Stan

Thu, 29 Jan 2009 19:20:39 +0000

This 2007 article, has it been updated to coincide with 2009 financial conditions?

Please advise

by: Dividends: a bad corporate strategy? - Early Retirement Forums

Wed, 07 May 2008 21:54:56 +0000

[…] Dividends: a bad corporate strategy? I just came across this 2007 blog comment on a Harvard Business Review article: Harvard�s Breakthrough Idea: Don�t Pay Dividends! ::: Capital Flow Watch. Unfortunately, I can’t access the original HBR article (not without paying a $6.50 fee, anyway). But reportedly it advocated the stupid "breakthrough idea" that, when faced with excess cash, management should waste the money on an acquiition strategy, notwithstanding inflated prices. I am not so na�ve as to think that this sort of warped corporate thinking doesn’t secretly happen all the time. But it’s rather shocking to see it publicly lauded by the Harvard Business School. __________________ "There is no more dreadful punishment than futile and hopeless labour" - Albert Camus […]