The Factors Involved in Setting a Dividend Policy Include All

question 65

Multiple Choice

The factors involved in setting a dividend policy include all of the following EXCEPT

• A) restrictive covenants in a bond indenture.
• B) capital impairment restrictions.
• C) growth prospects.
• D) the legal prohibition on paying dividends which exceed current earnings.

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Definitions:

Guaranteed Amount

A specific sum assured to be paid, often in the context of insurance or investment products, regardless of variable conditions.

Lease Payments

Periodic payments made by a lessee to a lessor for the use of an asset.

Inventory Cost

The total cost incurred to acquire inventory and bring it to its current condition and location, including purchase prices, freight, and handling fees.

Operating Lease

A leasing agreement allowing the lessee to use an asset temporarily without transferring the risks and rewards of ownership.