“Investors look at that record, and they count on it,” said Douglas J. Skinner, an accounting professor at the University of Chicago. “After a while, the dividend becomes sacrosanct.”
Cut dividends? For Coca-Cola, that’s almost unthinkable. Investors would probably see a dividend cut as a sign of trouble — a clear indication that the company is short on cash. So it’s not surprising that despite a crimp in its cash flow in recent years, Coke hasn’t wavered on its dividend. Many other companies would love to say the same, but they can’t.
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