What a dividend cut would really achieve

Reference no: EM13498690

Politicians also should ask themselves what a dividend cut would really achieve. Right now, the fading hope it will remain untouched is all that stands in the way of yet another sharp correction in BP's share price. Few will weep for shareholders. But that has real effects in terms of BP's ability to fund its operations, which are ultimately the bedrock on which expected payouts related to the leak rest.

Politicians have a right to be angry, but trying to set BP's dividend policy looks both unnecessary and possibly counterproductive. BP, in turn, must ask itself what it would gain by giving ground on this score. In today's heated climate, it isn't clear a purely symbolic cut would buy much in the way of political benefit. Indeed, it might merely encourage demands for more.

Reference no: EM13498690

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