The Primary Purpose of Laws Prohibiting a Firm from Paying

question 40

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 a substantial proportion of the firm's assets.
• D) prevent managers from paying large dividends.

---

Definitions:

Primitive

Basic data type provided by a programming language as a basic building block.

Programmer-Created Identifiers

Programmer-created identifiers are unique names defined by programmers for variables, functions, and other elements within a codebase.

Standard

An agreed-upon set of guidelines, criteria, or requirements that dictate certain practices or technical specifications.

Primitive

Basic data types provided by a programming language as building blocks for more complex data types.