In the boardrooms of corporate Australia and across the national press there has been a great debate unfolding. The suggestion is that payout ratios, or the amount of corporate income that is paid to shareholders in the form of dividends, are too high nationally. Apparently many companies are sacrificing future growth opportunities to satisfy the current income demands of their shareholders. There are actually two issues here. Payout ratios are too high if they are unsustainable in the context of existing capital requirements, operational cash flow, business growth and/or investment opportunities. If good investment opportunities are being foregone for the sake of paying dividends, this might be one reason that dividends are too high. But they might also be too high because business fundamentals are deteriorating, or working capital requirements are increasing, or regulatory standards are requiring balance sheets to be less leveraged. In this newsletter our discussion centres on whether companies are foregoing investment opportunities to satisfy the income demands of shareholders.