Cash management

Q:  Last year teams had significant troubles with cash management in the later stages of the game.  The industry appeared to still be in significant growth stages at the end of the competition.  Our understanding of cash management and dividend policy is that rapid growth industries typically do not issue frequent dividends - the cash should be reinvested to strengthen the position of the firm.  However, last year the teams with exorbitant amounts of cash at the end were issuing large dividends each quarter.

This seemed to help their stock price immensely, though as a policy it doesn't seem to match what we have learned.  Is this a symptom of the simulation?  Or is there some better way to manage our cash, should we be in the same situation this year?

A:  Dividends to shareholders is a decision variable that your team will have to decide.  BPG shareholders like dividends, and a regular dividend policy that allows payment of 30% to 60% of earnings may enhance your stock price.  But not if the result is insufficient cash and inability to invest in profitable projects.  It is best to develop your strategy and policy, and stick with it.