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Explain Why Some Small Start-Up Companies Choose Not to Pay

question 21

Essay

Explain why some small start-up companies choose not to pay dividends even though they make very large profits. Why might investors still be happy with this arrangement?


Definitions:

Club Sponsor

Refers to an individual or organization that provides support, often financial, to a club, typically in exchange for advertising opportunities or goodwill.

Customer Demand

The quantity of products or services that consumers are willing and able to purchase at various prices during a specific period.

Computer Clock

A mechanism within a computer that keeps track of time and coordinates the execution of tasks.

Wasted Capacity

Refers to the portion of the potential production output or service capability that remains unused or not effectively utilized.

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