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:

Savings

Money set aside for future use, typically in accounts that earn interest.

Interest Annually

The total interest that accrues over the course of a year, either on investments or loans.

Payment Now

An immediate payment, as opposed to payments scheduled in the future, often required to secure a purchase or service.

Interest

The cost of borrowing money, typically expressed as a percentage of the total amount borrowed.