Which of the Following Best Describes Restrictions on Cash Dividends

question 120

Multiple Choice

Which of the following best describes restrictions on cash dividends and treasury stock purchases?

• A)restrictions on cash payments that are made to ensure higher reported profits
• B)limits required by lenders or creditors to ensure that the company maintains adequate levels of equity
• C)restrictions on payments made by the shareholders to lower federal income tax expense
• D)limits that are established to boost sales revenues

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