A valid reason for managers not to pay no cash dividend is a situation where the ﬁrm is in ﬁnancial
distress and needs to conserve cash to meet its contractual obligations.

Question

Quizplus · Accepted Answer

When a firm is in financial distress, its managers may choose not to pay cash dividends in order to conserve cash and meet its contractual obligations such as paying off debt or meeting creditor demands. This can help improve the firm's financial situation in the short term and ensure its long-term survival.

A Valid Reason for Managers Not to Pay No Cash