Most ﬁrms are reluctant to _____ because of the associated implications concerning the ﬁrm.

Question

Quizplus · Accepted Answer

Reducing a regular cash dividend can signal to investors that the firm is not doing well financially, which can lead to a decrease in the firm's stock price and a loss of investor confidence. This decision can also affect the firm's ability to raise capital in the future. Therefore, most firms are hesitant to reduce regular cash dividends unless absolutely necessary.

Most ﬁRms Are Reluctant to _____ Because of the Associated