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.

---

Definitions:

Multiple Sclerosis

An autoimmune disease affecting the brain and spinal cord, characterized by damage to the myelin sheath that disrupts communication between the brain and the body.

Amygdala

A part of the brain within the temporal lobe that plays key roles in processing emotions such as fear, anger, and pleasure.

Endorphins

Naturally occurring peptides in the brain that act as neurotransmitters to reduce the perception of pain and can induce feelings of pleasure or euphoria.

Glial Cells

Non-neuronal cells in the nervous system that support, protect, and provide a scaffold for neurons.