> >Dividends on any class of stock cannot be guaranteed.
>
> Who was the fool who said they are "guaranteed?"
>
> The trouble with this sort of loose talk, Adam, is it vaguely implies
> DBourse or something claims they are "guaranteed," which would of
> course be bizarre.
I guess you just did. My post made no mention of TGC nor DBourse,
nor did the post I was replying to (John Kyle's description of common
versus preferred shares).
Certainly nothing can be guaranteed in the sense that the company might
not have the cash, or go out of businesses.
What I meant to clarify and CONFIRM, is that unlike debt interest, a
company's "commitment" to make dividend payments is not much firmer
that their "commitment" to turn a profit, which is very far from guaranteed.
Unlike debt interest, a company can only pay dividends from Net Income
or Retained Earnings, it cannot pay dividends from paid-in-capital nor by
borrowing money.
> Companies also commonly pay dividends from collected cash on hand
> from previous years
You're absolutely right. However, that should read *profits* retained from
previous years.
I was not criticizing TGC nor inferring they made claims they did not. I was
simply interested in clarification/confirmation on the issue of dividend
accounting.
Adam
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