Why do firms choose to cut or eliminate their dividends


Discussion

This discussion question has two parts. Respond to both parts to receive full credit for this assignment.

Part 1: Why do firms choose to make large increases in their dividends or start a stock repurchase program? Why would they choose one of these payout methods over another?

Part 2: Why do firms choose to cut or eliminate their dividends? What usually happens to the stock price of a company that does this?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Corporate Finance: Why do firms choose to cut or eliminate their dividends
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