Which of the Following Are NOT Legitimate Constraints on the Dividends

question 1

Multiple Choice

Which of the following are NOT legitimate constraints on the dividends a firm will pay to shareholders?

• A)Dividends must not eat into legal capital.
• B)Bondholders may have covenants limiting the amount of the dividend.
• C)Dividends may be constrained by the amount of cash a firm has.
• D)All are legitimate constraints on the dividends that firms choose to pay to shareholders.

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Definitions:

Spells of Unemployment

Periods during which an individual is actively searching for employment but is unable to find work.

Long-Term Unemployment

Refers to individuals who have been jobless for 27 weeks or longer while actively seeking employment during that time.

Labor-Force Participation

The ratio of the working-age group that is involved in the labor market, being either in employment or actively searching for a job.

Since 1950

A phrase indicating a time frame that starts from the year 1950 to the present, often used to denote changes or developments over that period.