Most States Limit Dividend Policy by Requiring

question 56

Multiple Choice

Most states limit dividend policy by requiring

• A)that dividends may not be paid unless the firm generates net earnings during the most recent year
• B)that dividends may only be paid out of retained earnings
• C)that dividends may not be paid when the firm is insolvent
• D)the firm's capital to be used to pay dividends

---

Definitions:

Nerves

Bundles of fibers that transmit sensory and motor information throughout the body.

Parietal Cells

Cells located in the lining of the stomach that secrete hydrochloric acid and intrinsic factor, essential for digestion and vitamin B12 absorption, respectively.

Intrinsic Factor

Intrinsic factor is a protein produced by the stomach lining that is essential for the absorption of vitamin B12, necessary for the production of red blood cells.

HCl

HCl, or hydrochloric acid, is a strong, corrosive acid commonly used in laboratory and industrial applications, and naturally present in gastric acid to aid in digestion.