Why Is a Company Required to Retain a Specific Part

question 57

Multiple Choice

Why is a company required to retain a specific part of its capital?

• A)protect the company's creditors.
• B)enable the payment of future dividends.
• C)facilitate a non-current asset replacement plan.
• D)use as security for future loans.

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Definitions:

Cooperate

To work or act together towards a common goal or benefit, often requiring compromise or teamwork.

Policymakers

Individuals or members of government bodies responsible for creating and implementing laws and policies.

Legitimate Purposes

Valid or acceptable reasons or objectives for a policy, action, or law as recognized by a governing body or morality.

Tit-For-Tat

A strategy in game theory where a player responds to an opponent's action with equivalent action.