A valid reason for managers not to pay no cash dividend is a situation where the firm faces insignificant flotation costs.

Question

Quizplus · Accepted Answer

Flotation costs are associated with raising new capital through issuing new securities, and not directly related to the decision of paying cash dividends. Managers might decide not to pay dividends due to other reasons such as reinvestment opportunities, liquidity concerns, or maintaining a stable dividend policy, but not because of insignificant flotation costs.

A Valid Reason for Managers Not to Pay No Cash