You are currently browsing comments. If you would like to return to the full story, you can read the full entry here: “How is it possible Citi group is still paying dividends when it is reporting losses?”.
How is it possible Citi group is still paying dividends when it is reporting losses?
Posted by admin on April 6th, 2010
Posted in 
Tags: 
<<<How is it possible Citi group is still paying dividends when it is reporting losses?>>>
A company can have losses and still have a positive cash flow that can be used to pay dividends.
Even if a company does not have a positive cash flow, it can borrow money to pay dividends.
<<<Shouldn’t a company only pay dividends when they are profiting?>>>
Opinions vary. I had a grandmother who’s primary income for many years came from dividends from a single company. If dividends had been eliminated she would have been hurt badly. Public companies are supposed to look out for the best interests of their shareholders, including shareholders like my grandmother. On the other hand, borrowing money to pay dividends weakens the company’s future prospects, hurting shareholders looking for growth.