A company that doesn't make a dividend payment is insolvent and may be forced into bankruptcy by the stockholders.

Question

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A company that doesn't make a dividend payment is not necessarily insolvent or in danger of bankruptcy. Many companies choose to reinvest their profits back into the business rather than pay out dividends. Stockholders may be disappointed by the lack of dividends, but it doesn't necessarily mean the company is insolvent.

A Company That Doesn't Make a Dividend Payment Is Insolvent