Sunday, June 13, 2010

Dividend -Especially BP Dividend

• As BP shares plunge, the company may suspend its dividend

Quoted from -Dan Roberts: Why BP should maintain its dividend, for now
Not for the first time in recent weeks, BP has found itself in a no-win situation.
The question has come to a head over the issue of whether BP should meet its routine dividend obligation to shareholders. On the basis of current estimates of fines and clean-up costs, this wealthy company ought to have enough cash resources to pay its dues in the Gulf of Mexico and continue normal dividend payments. But if the politically acceptable level of penalty proves to be one that is unaffordable then, by definition, BP cannot afford to carry on the rest of its activities with any semblance of normality.

Follow the link and read the whole article then answer the questions below in your note book.

1. What are the contrary views regarding dividends which divide UK and US opinion?
2. How have UK companies used ‘rights-issues’ recently?
3. Explain the following words and expressions
o Dividends
o Rights-issues
o One-off reward
Come to a head
o Asset-stripping
o Punitive damages
4. Do you think BP should pay dividends or not? Write a short paragraph to explain your reasons.
5. What questions or comment would you like to make on this issue?
6. Click on post your comments at the bottom of this article and ask your questions or make your comments. You will have to register and log on to post your comments.

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