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To: Ralph Bergmann who wrote (1756)6/11/1998 2:00:00 PM
From: smackdown  Read Replies (1) | Respond to of 4230
 
welcome back ralph

vbg



To: Ralph Bergmann who wrote (1756)6/11/1998 3:12:00 PM
From: Jon Klaus  Read Replies (2) | Respond to of 4230
 
A company wouldn't pay a dividend to avoid growth, but they would put it back in the shareholders hands if they perceived that was a better place than in their own bank. It does seem unusual for a company in this stage of development to initiate such a large dividend, but remember you measure the size of a dividend against earnings, not share price. A dividend of 5%+ of share price is pretty big, but a dividend of 15% or 20% of earnings is not quite so big.

This to me is a sign of the company being a serious cash cow. Earnings may be very impressive.

There may well be another reason than great performance for the dividend, but one thing is certain: management, who are major shareholders, are working in the best interests of shareholders, generally. Their interests are aligned.

Also, this is not the way for insiders to take cash out; the dividends would receive double taxation.

JK