How May a Reduction in Cash Dividends Be in the Best

question 85

Multiple Choice

How may a reduction in cash dividends be in the best interests of current shareholders?

• A)dividends are taxed at twice the rate of other gains.
• B)the firm will have available cash to increase current investment and future profits.
• C)reduced dividends increase managerial compensation, thus increasing their motivation.
• D)a reduction of cash dividends cannot be in the best interests of current shareholders.

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Definitions:

Fugue

A psychiatric disorder characterized by reversible amnesia for personal identity, including the memories, personality, and other identifying characteristics of individuality.

Memory

The faculty by which the mind stores and remembers information, allowing individuals to retain knowledge and experiences over time.

Dissociative Identity Disorder

A psychiatric disorder characterized by the presence of two or more distinct personality states or identities within a single individual, often as a response to trauma.

Anxiety Disorder

A psychiatric condition marked by overwhelming sensations of fear, anxiety, or worry that adversely affect daily functioning.