Several factors will be considered by the board of directors and management as they consider the level of dividend payout. Some of these factors include:

Question

Quizplus · Accepted Answer

All of the above factors will be considered by the board of directors and management as they determine the level of dividend payout. The ability of the firm to generate cash is crucial to sustain the level of dividends, while legal and contractual considerations can limit the firm's ability to pay dividends. Additionally, growth opportunities may require the firm to reinvest earnings instead of paying out dividends. Therefore, all of these factors must be evaluated in order to make an informed decision about dividend payout.

Several Factors Will Be Considered by the Board of Directors