The Primary Purpose of Laws Prohibiting a Firm from Paying

question 63

Multiple Choice

The primary purpose of laws prohibiting a firm from paying dividends that include its legal capital is to:

• A) reduce investors' tax liability.
• B) ensure that the balance sheet balances.
• C) prevent managers from paying out all the firm's assets.
• D)prevent managers from paying large dividends.

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Definitions:

Hypnosis

A deep state of concentration and relaxation, characterized by intense focus, increased openness to suggestion, and often employed for healing reasons.

Painkillers

Drugs or medication used to relieve pain.

Allergic

Having an adverse reaction of the immune system to a substance that is harmless to most people.

Insomnia

A sleep disorder characterized by difficulty falling asleep, staying asleep, or experiencing restful sleep.