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GM Holds Dividend at 50 Cents

Speculation has been that a dividend cut is in the offing.
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General Motors

(GM) - Get Report

kept its dividend intact Monday.

The Detroit auto giant said it would pay its regular 50-cent quarterly dividend June 10 to holders of record May 19. The announcement comes just days after GM shares were hammered by rating agency Standard & Poor's decision to

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tow GM's bonds into the junkyard, citing the company's faltering competitive position.

The S&P move is likely to increase GM's borrowing costs and

raised speculation in some quarters that the company will have to bring its payout down. With the stock fetching around $31 in the wake of investor Kirk Kerkorian's big tender offer announcement last week, GM stock yields nearly 6%. That is rich in the current environment, especially considering that GM is on track to burn some $5 billion in cash this year by some estimates.

GM rose 63 cents Monday to close at $31.39.