Why do companies play dividends?
Companies will pay dividends out of their after tax earnings. It's generally done to signal to shareholders that the balance sheet is strong and that growth is expected without the need to reinvest all free cashflow back into the business.
Below is an instruction that describes a task, paired with an input that provides further context. Write a response that appropriately completes the request.
### Instruction: Why do companies play dividends?
### Input: 
### Response: Companies will pay dividends out of their after tax earnings. It's generally done to signal to shareholders that the balance sheet is strong and that growth is expected without the need to reinvest all free cashflow back into the business.