#9176458, By Lamb Stocks and shares. Maybe I'm just a bit dim...

  • Lamb 23 Nov 2012 19:32:27 955 posts
    Seen 3 hours ago
    Registered 9 years ago

    A business has no incentive to do what it does not want to do. The government has to make a law or create a carrot for them to pursue it. Even with this carrot its dubious whether the company is adequately pursuing the government's agenda. Shareholders want or rely on a dividend and if they don't get it they pull their money out and invest it elsewhere. If it happens on a large scale there will be much less cash for a companies day to day operations, which has a knock-on effect on being able to pay the employees, and the loan on the assets if the cash flow on the revenue on the products and/or services is much less than that going towards expenses and thus making a loss. Further pushing down its value in the eyes of potential shareholders, who will bid even less if they still have an incentive to do so.
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