Managements are often reluctant to reduce dividends because reductions may be viewed as indicating financial weakness.

Name: Managements are often reluctant to reduce dividends because reductions may be viewed as indicating financial weakness.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Management may avoid reducing dividends as such actions can signal financial instability or a lack of confidence in future earnings, potentially worrying investors and negatively impacting the company's stock price.

Managements Are Often Reluctant to Reduce Dividends Because Reductions May