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The Retention Trap: Why Companies Hold Back Dividends

The Retention Trap: Why Companies Hold Back Dividends

Update: 2025-08-15
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In this edition we take a look at dividend policy and the habit that many businesses have fallen into of retaining earnings when it is not always in the shareholders best interest for them to do so. We consider why many businesses and management teams like to retain earnings rather than pay them out as dividends and why many investors instinctively believe that this is in their best interest.

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The Retention Trap: Why Companies Hold Back Dividends

The Retention Trap: Why Companies Hold Back Dividends

David Coombs