A Valid Reason for a fiRm to Reduce or Eliminate

question 119

True/False

A valid reason for a firm to reduce or eliminate its cash dividends is if the tax laws have recently
changed such that dividends are taxed at an investor's marginal rate while capital gains are tax
exempt.

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Definitions:

Specialized Subunits

Divisions or departments within an organization that focus on a specific type of work, expertise, or service.

Legal Enforcement Arm

Agencies or departments responsible for ensuring compliance with laws and regulations, and for enforcing penalties for violations.

Knowledge Workers

Knowledge workers are employees who primarily work with information or develop and use knowledge in the workplace, such as programmers, engineers, and scientists.

Psychological Contract

A psychological contract is the overall set of expectations held by the employee with regard to what he or she will contribute to the organization and that are held by the organization with regard to what it will provide to the individual in return.