If you are a shareholder in a profitable company, would you expect a dividend to be paid, or would you be satisfied if all earnings stayed within the organization as retained earnings? Please explain!

Question

If you are a shareholder in a profitable company, would you expect a dividend to be paid, or would you be satisfied if all earnings stayed within the organization as retained earnings?  Please explain!

Ms. Sue · Answer

That depends upon my financial goals.

If I want relative safety and income, I want dividends. If I'm willing to take some risk and want the company and the share price to grow, I'll opt for no dividends.