Directors usually declare dividends less than the legal maximum and thereby allow retained earnings to increase as a matter of corporate financial policy for what reason(s)?
a. Available cash did not increase by as much as the amount of earnings, so paying the maximum legally permitted dividends would require raising more cash.
b. Restricting dividends in prosperous years may permit continued level or steadily growing dividend payments in poor years.
c. The firm may need funds for expansion of working capital or for plant and equipment.
d. The firm can distribute the funds to shareholders with lower tax burdens for them by using the cash to repurchase shares.
e. all of the above
E
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Periods in time that experience increasing price levels are known as periods of:
A) inflation B) recession C) depression D) deflation
Acme, Inc., produces widgets. To manufacture a new type of widget, it took 79 hr for the first widget. Acme estimates it has a 94% learning rate. Using the logarithmic approach, calculate the time it will take to manufacture the 128th widget.
A. 59.35 hr B. 57.90 hr C. 51.27 hr D. 49.94 hr
Corporations are owned by stakeholders
Indicate whether the statement is true or false
The courts and the Treasury Regulations have mentioned a number of reasonable needs that allow a corporation to accrue earnings and avoid the accumulated earnings tax. What are these reasons?
What will be an ideal response?