Which of the Following Represents a Legal Restriction on the Payment

question 36

Multiple Choice

Which of the following represents a legal restriction on the payment of dividends?

• A) The dividend must be paid prior to the ex-dividend date.
• B) The total dividend cannot exceed shareholders' equity.
• C) A loan covenant which restricts the dividend to 10% of net income.
• D) A stock dividend is restricted to Canadian shareholders.
• E) A takeover threat limits the dividend a company can pay.

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Definitions:

Beef Prices

Beef prices are determined by the market dynamics of supply and demand for beef, influenced by factors like feed costs, consumer demand, and industry regulations.

Frozen Yogurt

A frozen dessert made with yogurt and sometimes other dairy and non-dairy products, known for being a healthier alternative to traditional ice cream.

Market Shift

A change in the supply or demand conditions in a market, leading to a new equilibrium of prices and quantities.

Gasoline

A fluid energy source obtained from crude oil, predominantly utilized to operate engines based on internal combustion.