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2. (2 points) On May 14, 2008, General Motors paid a dividend of S0.25 per share. During the same quarter GM lost a staggering $15.5
2. (2 points) On May 14, 2008, General Motors paid a dividend of S0.25 per share. During the same quarter GM lost a staggering $15.5 billion or $27.33 per share. Seven months later the company asked for billions of dollars of government aid and ultimately declared bankruptcy just over a year later, on June 1, 2009. At that point a share of GM was worth only a little more than a dollar. 4 a) If you exclude possibility of government bailout, how would you explain the decision to pay the dividend? b) How would you explain the decision to pay the dividend if GM executives anticipated that there was a possibility of a government bailout should the firm be forced to declare bankruptcy
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