A Corporation Has Been Paying Out $1 Million Per Year

question 163

Multiple Choice

A corporation has been paying out $1 million per year in dividends for the past several years.This year,the company wants to pay the $1 million dividend,but can't.All of the following are reasons the company cannot continue its dividend payment policy except:

• A) the company's net income this year is less than $1 million.
• B) the company's retained earnings balance at the end of the year is less than $1 million.
• C) the company's cash balance is less than $1 million.
• D) the company's liabilities exceed its assets.

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Definitions:

Moral Lapses

Instances where individuals fail to act in accordance with their ethical principles or societal norms.

Virtuous Cycle

A sequence of events that reinforce itself through a feedback loop, resulting in positive outcomes.

Social Responsibility

The obligation of individuals and companies to act in a way that benefits society at large, often involving environmental sustainability, ethical business practices, and community development.

Corporate Performance

Measures the efficiency and effectiveness of a company in achieving its goals, often evaluated through financial metrics, operational productivity, and market position.