Death of the Dividends…

February 2000
Journal of Financial Planning;Feb2000, Vol. 13 Issue 2, p23
Academic Journal
This article highlights a study published by Eugene F. Fama of the University of Chicago in Illinois and Kenneth R. French of Massachusetts Institute of Technology in Cambridge regarding the reasons for the decline in dividend yields in the U.S. First, only 20.7 percent of all publicly traded companies pay dividends as of February 2000, versus 66.5 percent just 20 years ago. The professors attribute part of this to the increase in the number of companies who either are not profitable or who need the cash to grow. The other big factor in the decline in dividends is that even big profitable companies are paying smaller dividends or no dividends at all, though the reasons why are not clear.


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