> The key fact that the article ignores is that the shareholders collectively own the company. So if they all decline the dividend, they are effectively electing for the company they own to hold the cash (that they own by owning the company).
The other thing that they can do is use the cash for stock buybacks. And it's all (theoretically) equivalent: the company and its cash pile are worth the same amount of money either way.
Of course, questions arise in practice like tax treatment, and the fact that people who own businesses in practice don't want to own as much cash - that's what bank accounts are for, no need to glue them together - or whether companies systematically overpay for stock buybacks because they do it while the company feels prosperous as opposed to times when the stock is affordable.
The other thing that they can do is use the cash for stock buybacks. And it's all (theoretically) equivalent: the company and its cash pile are worth the same amount of money either way.
Of course, questions arise in practice like tax treatment, and the fact that people who own businesses in practice don't want to own as much cash - that's what bank accounts are for, no need to glue them together - or whether companies systematically overpay for stock buybacks because they do it while the company feels prosperous as opposed to times when the stock is affordable.