Shawn starts a business called ValueCentral.com, the concept takes off, and the company has an IPO and goes public. The company is growing very rapidly and trying to keep up with customer demand. What type of dividend is this company likely to pay its stockholders?
A)A large dividend due to high earnings
B)An average size dividend
C)Very small or no dividend
D)All profits to be paid as dividends
E)As no stock is involved, dividends irrelevant

Question

Quizplus · Accepted Answer

Typically, fast-growing companies like ValueCentral.com reinvest their profits into the business to keep up with the customer demand and expand their operations, rather than paying out dividends to their stockholders. Therefore, it is likely that the company will pay very small or no dividends at all.

Shawn Starts a Business Called ValueCentral