Why do some firms with high capital expenditure and loaded with a lot of debt (like tech & telecom firms) still issue dividend to shareholders? What's the point?
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They have steady, predictable streams of revenues that can be accurately projected out into the future - particularly telecom firms which are really like utilities. Yes, they have high CapEx, but generally, they still tend to generate mountains of cash that they can't easily put to work.
Additionally, they drive high dividend payouts (1) because the management teams may not have a clue about value accretive new initiatives for that capital (2) because they think their multiples are substantiated by their high div payout (e.g. a disproportionate amount of inst fund managers buy their stock for income instead of appreciation)
i think the fed offers a good dividend(they sure are loaded with debt)
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