Which of the following is not one of the primary considerations management must make before a cashdividend is declared?O The availability of funds to pay the dividend.O The effect of inflation on the company and alternative uses of the cash to be paid for dividends.O The legal permissability of the dividend.O The tax impact on stockholders of the receipt of the dividends.

Answer: Primary considerations are those which directly impact any decisions made for the company.…

Answered: Which of the following is not one of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 2QTD

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Similar questions

Cash dividends declared out of current earnings were distributed to an investor. How will the investors investment account be affected by those dividends under each of the following accounting methods?
How does the accounting for a liquidating dividend differ from that for a normal cash dividend?
How do creditors assess risk when lending funds to a company?
Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
Which of the following statements is incorrect? A. Dividend payments can be influenced by cash availability. B.Dividends shall not be paid out of assets to protect the creditors. C. Corporations must pay their investors dividends so they will not be charged penalty for improper accumulation. D. Additional funding may be sourced from retained earnings.
How does the declaration of a cash dividend affect a company’s assets, liabilities, and equity?a. It results in an increase to liabilities and a decrease to stockholders’ equity, while assetsremain the same.b. It results in an increase to liabilities and a decrease to assets, while stockholders’ equityremains the same.c. It results in an increase to assets and a decrease to liabilities, while stockholders’ equityremains the same.d. It results in an increase to stockholders’ equity and a decrease to assets, while liabilitiesremain the same
The net effect to a corporation of the declaration and payment of a cash dividend is to: a. increase assets and increase stockholders' equity b. increase stockholders' equity and decrease liabilities C. decrease liabilities and decrease stockholders' equity d. decrease assets and decrease stockholders' equity A Moving to the next question prevents changes to this answer.
Measures of a company's liquidity are concerned with the frequency and amounts of dividend payments, true or false?
Which of the following is most likely true regarding payment of dividends? a. Dividends may be paid from legal capital b. Retained earnings are available for dividends unless restricted by contract or by statute c. Unrealized capital is available for any type of dividend d. Capital from donated assets is available for dividends
What questions do investors and creditors ask about the company's future cash flow based on the facts in the income statement?
Answer the following questions for the directors: True or false, does the statement of cash flows explains the difference between net income and the change in the cash balance? True or false, investors and management use the statement of cash flows to evaluate a firm's profitability? True or false, the financing activities section of the statement of cash flows includes paying dividends and paying off loans?
How can changes in working capital items, such as accounts receivable and inventory, affect the cash flow statement, and how can these changes be interpreted by investors and creditors?

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