{"id":"3c2afc8a4bf77dbd2e28ff74a4608b56166d1f90e9088dada4b394303e571fcc","title":"Aswath Damodaran argues dividend policy often misaligns cash returns and business needs","argument":"Aswath Damodaran’s post, published February 24, 2026, argues that dividend policy is dysfunctional at many firms because dividends can become rigid through inertia and pressure to follow industry peers. He says this can lead businesses to reject good investments or borrow to sustain dividends. Buybacks offer companies more flexibility, in his view, but neither buybacks nor dividends are inherently value-creating: buybacks can transfer wealth between shareholders, depending on their price and effects on leverage.\n\nDamodaran’s proposed guide is free cash flow to equity: cash available after taxes, reinvestment and debt payments. He argues that companies should not return more cash than they can afford, while recognizing that positive cash flow does not obligate a company to pay it out. 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Minor nuance: price drives the wealth transfer, while leverage affects value per share.","excerpt":"While buying back stock has always been an option available to US companies"},{"dimension":"date","status":"pass","explanation":"originalPublished is 2026-02-24T18:45-05:00, which is February 24, 2026 in UTC as well, matching the reading. Kind is publisher-page, so no archive disclosure is needed. There is no hindsight framing, and forecasts are not presented as outcomes. The page was modified after publication (October 2026), but the reading relies only on the post's core body, which is plainly part of the original piece.","excerpt":null},{"dimension":"support","status":"pass","explanation":"Each claim matches the source text: dysfunction driven by inertia and me-tooism; dividends causing firms to turn away good investments or borrow; buyback flexibility; value transfer; free cash flow to equity; 18% of money-losing firms paying dividends; and the conclusion. 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