Dividends are payments made by a corporation to its shareholder members. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend.
Now in case of banks and big blue chips across the world, it’s weird that banks are still paying dividends to shareholders and bonuses to their employees. By the vary definition of bonus and dividend any child can understand that these should only be paid only when organisation is in profit and have surplus left after setting aside money for future expansions.
Banks in US, UK and Europe are bailed out by the taxpayers of those countries and banks are using this amount to pay investors and awarding themselves!! I agree that Mutual funds, retirees, teachers, pension funds are all beneficiaries of dividend payments. They get dividend payments from banks, Nevertheless it should be done only when they are generating profit.
The dividend banks in US are paying after adjusting to current market price comes out to be yielding 5-8%. Bank of America which needs billions of dollars in additional federal money to help it complete its acquisition of Merrill Lynch this week should be asked to cut its dividend payout, now an annualized $1.28 a share. This is been demanded by nearly economist, media and general public, but still Bush Govt. think it’s unfair to make banker suffer for whatever they have done to the economy.
Now in case of banks and big blue chips across the world, it’s weird that banks are still paying dividends to shareholders and bonuses to their employees. By the vary definition of bonus and dividend any child can understand that these should only be paid only when organisation is in profit and have surplus left after setting aside money for future expansions.
Banks in US, UK and Europe are bailed out by the taxpayers of those countries and banks are using this amount to pay investors and awarding themselves!! I agree that Mutual funds, retirees, teachers, pension funds are all beneficiaries of dividend payments. They get dividend payments from banks, Nevertheless it should be done only when they are generating profit.
The dividend banks in US are paying after adjusting to current market price comes out to be yielding 5-8%. Bank of America which needs billions of dollars in additional federal money to help it complete its acquisition of Merrill Lynch this week should be asked to cut its dividend payout, now an annualized $1.28 a share. This is been demanded by nearly economist, media and general public, but still Bush Govt. think it’s unfair to make banker suffer for whatever they have done to the economy.
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