Several Factors Will Be Considered by the Board of Directors

question 150

Multiple Choice

Several factors will be considered by the board of directors and management as they consider the level of dividend payout.Some of these factors include:

• A)the ability of the firm to generate cash to sustain the level of dividends.
• B)legal and contractual considerations
• C)growth opportunities
• D)cost of other financing sources
• E)all of the above

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Definitions:

Tender Offer

A public offer by a bidder to purchase a subject company’s shares directly from its shareholders at a specified price for a fixed period of time.

Greenmail

A situation where a company buys back its own shares at a premium from a potential acquirer to prevent a takeover.

Going Private

A transaction or series of transactions in which a publicly traded company is transformed into a privately held one.

Freeze-Out

In corporation law, a type of oppression by which only minority shareholders are forced to sell their shares.