How May a Reduction in Cash Dividends Be in the Best

question 102

Multiple Choice

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

• A) A reduction of cash dividends is always in the best interests of current shareholders.
• B) The firm will have available cash to increase current investment and future profits.
• C) Reduced dividends increase managerial compensation, thus increasing managers' motivation.
• D)A reduction of cash dividends cannot be in the best interests of current shareholders.

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Definitions:

Pathogens

Microorganisms, such as bacteria, viruses, fungi, or parasites, that can cause disease or illness in their host.

Geographic Locations

Specific places or areas on Earth's surface identified by their physical and geographic characteristics.

Pandemic

An epidemic of an infectious disease that has spread across a large region, for instance multiple continents or worldwide, affecting a substantial number of people.

Epidemic

A widespread occurrence of an infectious disease within a community or region over a specific period.