IBM Corp’s shares made a new low of $89.625 on Friday… we queried whether it will maintain its dividend a couple of issues back (CI No 1,817), and the company faces a nasty dilemma: the share price will plunge if it cuts the dividend, and it won’t be Good Ol’ Big Blue with the investment fraternity any longer but if it doesn’t cut, it’s rock-solid credit rating is going to be whittled away, increasing the amount it has to pay to borrow cash it will certainly need; Moody’s and Standard & Poor’s may well cut their ratings even with a dividend cut, but the level of the dividend will determine the credit rating.
