Which of the Following Are Not Legitimate Constraints on the Dividends

question 71

Multiple Choice

Which of the following are not legitimate constraints on the dividends a firm will pay to shareholders?

• A)Dividends must not eat into legal capital.
• B)Bondholders may have covenants limiting the amount of the dividend.
• C)Dividends may be constrained by the amount of cash a firm has.
• D)All are legitimate constraints on the dividends that firms choose to pay to shareholders.

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