Some companies have been known to pay dividends to current shareholders while simultaneously raising capital through a new equity issue. Generally, this behaviour is explained by the need to discipline managers in regularly exposing the company to the extra scrutiny involved in an equity issue.

Question

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This behaviour is commonly known as a dividend-issuing equity raise, and is often used as a way to signal to investors that the company is maintaining financial discipline and transparency. By paying dividends while also raising capital, the company can demonstrate to investors that it is committed to creating long-term shareholder value.

Some Companies Have Been Known to Pay Dividends to Current