You Are the CFO of a Non-Dividend Paying Firm That

question 95

Essay

You are the CFO of a non-dividend paying firm that currently has excess cash reserves.You are preparing for an internal management meeting where dividends are on the agenda.You know that the CEO favors the commencement of a dividend program.You,however,oppose any dividend plan at this time.Write a good argument that you can use in the meeting to support your position.

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Definitions:

Environmental "Superfund"

A program established by the United States government in 1980 to address hazardous waste sites and to clean up environmental contamination.

National Medical Insurance

A government-provided insurance plan aimed at ensuring healthcare coverage for all citizens.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Panama Canal

A man-made waterway in Panama that connects the Atlantic Ocean with the Pacific Ocean, significantly reducing the maritime journey time by avoiding the lengthy southern tip of South America.