Final answer:
The unwillingness of many older, giant firms to cut dividends is referred to as dividend stickiness. This behavior is often attributed to the desire to maintain a positive relationship with shareholders and avoid negative reactions.
Step-by-step explanation:
The unwillingness of many older, giant firms to cut dividends is referred to as dividend stickiness. This term refers to a situation where companies are reluctant to decrease or eliminate dividend payments to shareholders, even during times of financial difficulty.
This behavior is often attributed to the desire to maintain a positive relationship with shareholders and avoid negative reactions, such as a decrease in stock price or investor confidence.
For example, a company might continue paying dividends to demonstrate stability and attract new investors, even if it means relying on debt or other means to cover the payments.