Several regulations limit dividend payments. Which of the following do not limit dividend payments?
A) Capital impairment restriction
B) Restrictive covenants
C) Net earnings restriction
D) Liability restriction

Question

Quizplus · Accepted Answer

Liability restriction does not limit dividend payments. Capital impairment restriction limits dividend payments when a company's capital falls below a certain level. Restrictive covenants limit dividend payments as part of a loan agreement. Net earnings restriction limits dividend payments based on a company's profitability.

Several Regulations Limit Dividend Payments