A Valid Reason for a Firm to Reduce or Eliminate

question 21

True/False

A valid reason for a firm to reduce or eliminate its cash dividends is if the firm is on the verge of violating a bond restriction which requires a current ratio of 1.8 or higher.

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Definitions:

Activity

Any action or task undertaken by individuals or groups, often aimed at achieving a specific goal or outcome.

Centralization

Refers to the concentration of decision-making authority at the top levels of an organizational hierarchy.

Organizational Survival

The ability of an organization to continue existing and operating over time, often through adapting to changes in its environment.

Major Threat

A significant danger or risk that has the potential to cause serious harm or disruption to an entity or project.