On May 14, 2008, General Motors paid a dividend of $0.25 per share. During the same quarter, GM lost a staggering $15.5Bns or $27.33 per share. Several 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.

If you ignore the government bailout, the decision to pay a dividend given how close the company was to financial distress is an example of what kind of cost?

	Asymmetries of information
	Conflicts between shareholders and debtholders
	Moral hazard