What could happen to dividend yields?

Currently the returns of government bonds decrease and almost approach the negative zone and banks are ready to charge negative rates on deposits and some banks actually have already taken action. In addition, the new raised equity significantly dropped last half of this year. When the uncertainty overwhelms the market, the investment on risky assets becomes unpopular. When investors reduce their investment on equities, which are usually considered to be more risky compared with low yield bonds, some firms may face equity contraction. The contraction of equity may lead firms to financial difficulties as banks like to lend money to firms with large equities. In order to maintain their capitalisation levels, many firms may choose to increase dividend yields to keep their investors and maintain their equity prices. Of couse, increasing dividend yields could make themselves more attractive; however, such action could increase the financial difficulties and some investors may concern their abilities of paying dividends or supporting future growth. Therefore, not all companies can increase their dividend yields, only those big ones are able to do so. The smaller companies may even reduce their dividend yields as they have to maintain rapid growth trends to attract investors; otherwise, they will be forced out of the competition due to the increasing financial pressure.