Why Have Firms Been Willing to Borrow Money in the Absence

question 122

Multiple Choice

Why have firms been willing to borrow money in the absence of having sufficient cash to pay dividends?

• A) Defaulting on dividends lowers credit ratings.
• B) Borrowing is cheaper than paying to omit dividends.
• C) Borrowing increases the firm's asset base.
• D) Dividend cuts often signal bad future performance.

---

Definitions:

Coaching and Mentoring

Supportive relationships in which experienced professionals help others develop their skills and knowledge, often through one-on-one guidance.

Conference Board of Canada

A not-for-profit research organization that specializes in economic trends, organizational performance, and public policy issues in Canada.

Wilderness Training

A specialized form of training focusing on survival skills and outdoor competencies, often used for personal development and team-building exercises.

Incongruence

A state of disparity or inconsistency between two or more elements, such as beliefs, values, or behaviors.