Which One of the Following Is Not a Reason Why

question 121

Multiple Choice

Which one of the following is not a reason why a corporation's ability to pay dividends may be restricted?

• A)An agreement with bondholders may require that the balance of retained earnings be maintained at a minimum level.
• B)The board of directors may set aside designated amounts for future expansion or other business purposes.
• C)State laws may require that the retained earnings balance cannot fall below the cost of treasury stock.
• D)The corporate charter may require that transactions with nonowners be excluded from retained earnings.

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Definitions:

Organizational Stakeholders

Individuals or groups that have an interest, stake, or investment in the success and operations of an organization, including employees, customers, investors, and suppliers.

Behaviour

This encompasses the actions or reactions of an individual or group, often in response to their environment or stimuli.

Performance

The act of carrying out a task or function, often evaluated against known standards or objectives.

Social Responsibility Audit

A measure of an organization's performance in various areas of social responsibility.