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These companies have come to recognize what finance academics have been preaching for decades: for financially healthy firms, there is no particular imperative to pay dividends every quarter, because retained cash can always be paid out to shareholders later, or used to repurchase stock.
"Management doesn't pay all of the FCF out in dividends (current dividend yield is 2.9%), but as long as they pursue profitable growth with the retained cash, we should theoretically receive a minimum return on investment of 9% annually".
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It is intended to encourage banks to retain cash, perhaps as a buffer against hard times.
But ITV was now a company completely focused on retaining cash, was the meeting's theme.
Managers have incentives to retain cash in part because cash reserves increase their autonomy vis-à-vis the capital markets.
The limited partners, who retain cash stakes, were given a choice of investing in the new Goldman shares or cashing out now.
Having ended such a costly war, it wants to give the LTTE, which retains cash and support among expatriate Tamils, no chance to recover.
Phelps Dodge, which is based in Phoenix, cut debt last year and is retaining cash, which helps counter declines in copper prices, S.&P. said.
The Guardian retains cash and investments of £765m, down from £838.3m last year, and its stake in Ascential was worth £206m in April following the writedown.
And there is a risk of stranding assets if companies are forced to retain cash for which they have no currently profitable use.
Elsewhere, sleepwalking judges and prosecutors retain cash bail systems simply because they've been around as long as anyone can remember.
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