Question

Which of the following is NOT one of the major reasons why companies rarely pay dividends in amounts equal to their legally available retained earnings? Select answer from the options below to retain assets that would otherwise be paid out as dividends to finance growth or expansion through the process known as internal financing to maintain bond covenants with specific creditors that require retention of earnings in the form of assets to build up protection against possible loss to smooth out dividend payments from year to year by accumulating earnings in good years and using such accumulated earnings as a basis for dividend payments in bad years to meet federal or provincial corporation law requirements that earnings equivalent to the paid-in value of their shares be restricted against dividend declarations

          Which of the following is NOT one of the major reasons why companies rarely pay dividends in amounts equal to their legally available retained earnings?
Select answer from the options below
to retain assets that would otherwise be paid out as dividends to finance growth or expansion through the process known as internal financing
to maintain bond covenants with specific creditors that require retention of earnings in the form of assets to build up protection against possible loss
to smooth out dividend payments from year to year by accumulating earnings in good years and using such accumulated earnings as a basis for dividend payments in bad years
to meet federal or provincial corporation law requirements that earnings equivalent to the paid-in value of their shares be restricted against dividend declarations

Added by Bladiger

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