Which of the Following Should NOT Influence a Firm's Dividend

question 30

Multiple Choice

Which of the following should NOT influence a firm's dividend policy decision?

• A) A strong preference by most shareholders for current cash income versus capital gains.
• B) Constraints imposed by the firm's bond indenture.
• C) The fact that much of the firm's equipment has been leased rather than bought and owned.
• D) The fact that Congress is considering changes in the tax law regarding the taxation of dividends versus capital gains.
• E) The firm's ability to accelerate or delay investment projects.

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Definitions:

Finished Products

Goods that have completed the manufacturing process and are ready for sale.

Cane Juice

The liquid extract obtained from the crushing of sugarcane, used as a sweetener or beverage.

Molasses

A thick, dark syrup produced during the refining of sugar or from sorghum, used as a sweetener or in industrial alcohol production.

Financial Advantage

The benefit gained in financial terms, which could be in the form of profits, savings, or returns, from conducting an investment, operation, or action.