Which of the Following Would Be a Reason for a Company

question 146

Multiple Choice

Which of the following would be a reason for a company to restrict its cash dividends or treasury stock purchases?

• A) Because the company needs treasury stock to offer as performance incentives to upper management
• B) In order to give shareholders stock dividends
• C) Due to the desire of shareholders to retain the company's earnings for future growth and capital expenditures
• D) Due to requirements of lenders or creditors that companies maintain enough equity to meet their obligations

---

Definitions:

Indirect Benefits

Advantages or positive effects that are not directly linked to the initial action or investment, often realized over time or through secondary channels.

Job Creation

The process of providing new employment opportunities, often seen as a critical aspect of economic growth and development.

State Investment

Financial contributions or assets placed by government entities into projects, companies, or other ventures to stimulate economic growth or achieve policy objectives.

Partial Ownership

A situation where an entity or individual holds an interest or stake in a business or property but does not have full control or possession of it.