Find a news article that discusses a recent (past 6 months) cash dividend issuan

Question

Find a news article that discusses a recent (past 6 months) cash dividend issuance or cash dividend policy change for a corporation.

In your discussion response, please provide the link to the article that you have located, then provide a one-to-two paragraph answer to the following question, based on what you found:

In your response, discuss the mindset/hopes/ideology of the company in regards to its cash dividend issuance or policy. Why is this company issuing dividends and what message are they currently trying to send to investors?

Explanation / Answer

https://www.bloomberg.com/news/articles/2018-06-08/ge-reaffirms-dividend-soothing-wall-street-fears-of-another-cut

Ge has been facing stiff challenges for past some time now. Its reputation has been hit by and accounting investigation and has liabilities that are difficult to payoff as sales for its gas turbines have not been good. Lesser amount of sales lead to a lesser amount of cash flow and as CEO Flannery pointed out, Dividend is a function of cash flow. Hence higher cash flow lead to a higher dividend. GE may not have cut dividends this time around, but if conditions worsen it may be forced to do so.

According to signalling theory, any unexpected dividend cut shall lead to a steep fall in Share price. GE has not cut dividends as it does not want more erosion of its market cap due to fall in share price. Since last september the price of GE has fallen from $24.87 to $12.39 recently which is nearly a 50% decrease in 12 months. Any further reduction could spell doom for the company. The message is clear that they have not cut dividends and the company is still operating properly.

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