A company can increase its dividend payments by issuing more shares.

Question

Quizplus · Accepted Answer

A company cannot increase its dividend payments by issuing more shares. Dividend payments are based on the company's earnings and are usually paid out to shareholders in proportion to their ownership of existing shares. Issuing more shares does not increase the company's earnings, but instead dilutes the earnings per share and can even lower the dividend per share. Therefore, a company would typically increase its dividend payments by improving its financial performance and increasing its earnings.

A Company Can Increase Its Dividend Payments by Issuing More