Reduced Reinvestment

Reduced Reinvestment

Companies that commit to paying high dividends may have less capital available for reinvestment into the business.

This can hinder growth opportunities, such as expanding into new markets, developing 관련주 new products, or acquiring other companies.

  1. Example: A company like Verizon, with a significant portion of earnings dedicated to dividends, may have less flexibility to invest in new technology or infrastructure compared to a non-dividend-paying tech startup.

Increased Debt Levels

To maintain or grow dividend payments, some companies may resort to taking on debt. While this can support short-term dividend stability, it increases financial risk and interest expenses, potentially compromising long-term financial health.

  1. Example: If a company like ExxonMobil faces cash flow constraints but wants to maintain its dividend, it might issue debt, increasing its leverage and financial risk.