To: Peter J Hudson who wrote (10592 ) 4/14/2001 2:37:02 AM From: Puck Read Replies (1) | Respond to Fact is, Nokia has been able to pay out one third of their earnings every year to shareholders without it affecting their growth rate. I don't believe that their E.P.S. growth rate would be improved to a worthwhile degree if they were to retain more or all of their earnings. In fact, I believe that they would have more capital than they know what to do with and that the odds would increase greatly that they would piss a good part of it away on worthless ventures. As it is, they pay a generous dividend, have enough to embark upon a repurchase of 50 million of their own shares, and still have enough to meet the financial needs of growing their business. In fact, I believe that paying out a regular dividend is good fiscal discipline for a company. Returning profits to shareholders should be the goal of any company's management and doing so reduces the risk that management might spend excess capital foolishly. Doing so also keeps the asset size of the balance sheet nicely in check, thus keeping return on assets and return on equity higher because of this discipline. Your attitude that you'd rather not receive any earnings from the company at all and instead expect or trust management to invest all the earnings wisely I find laughable. If Nokia really needed more capital to expand their business, they would adjust the dividend accordingly. Fact is, Nokia's management has decided that it has more capital than it needs. The rest is excess and should be quite appropriately returned to the shareholders.
