Hi, I'm a novice, so tell me where I'm wrong. This is nothing new, just a feeling I've had for a long time.
WHY do companies go into debt to pay unsustainable dividends? Were I a shareholder, I would actually prefer the company retained at least some earnings per share!
Transurban's unsustainable dividends have caused a totally predictable credit rating cut for the company. Wouldn't the company be better off cutting its dividend enough to maintain a good credit rating?
This is not a remotely new issue. But I'm baffled by the "finance games" like this that companies play, and would like some crash-course explanation on the logic of such dividend payments.
This is only my second post here, so once again, please be kind in explaining "capitalism 101"
Transurban self-cannibalizing with unsustainable dividends?
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