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During a Recession,companies with a Significant Portion of Their Capital

question 16

True/False

During a recession,companies with a significant portion of their capital structure in the form of common share equity (i.e.,low leverage) often struggle to provide a continuous stream of dividend income to their shareholders.


Definitions:

Entitlement

Government programs guaranteeing certain benefits to a particular group or segment of the population, such as Social Security and Medicare.

Social Security

A government program designed to provide financial assistance to people who are retired, disabled, or in other specific situations that affect their earning capacity.

Medicare

A federal health insurance program in the United States for people aged 65 and older, and for some younger individuals with disabilities.

Federal Program

A program funded and administered by the national government to achieve specific policy objectives.

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