Managers avoid cutting dividends even in response to short-term fluctuations in earnings.

Name: Managers avoid cutting dividends even in response to short-term fluctuations in earnings.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Managers often see dividends as a signal of company stability and commitment to shareholders. Cutting dividends can lead to a negative perception and affect the stock price. Therefore, managers tend to avoid cutting dividends even if earnings fluctuate in the short term.

Managers Avoid Cutting Dividends Even in Response to Short-Term Fluctuations