No need exists to apply the two worst-case assumptions if a cash distribution plan is prepared.

Question

Quizplus · Accepted Answer

A cash distribution plan is a financial plan that outlines how a company will distribute its cash to its shareholders. The two worst-case assumptions that are typically applied to cash distribution plans are that the company will not be able to generate enough cash to meet its obligations and that the company's stock price will decline. However, if a cash distribution plan is prepared, these two assumptions do not need to be applied because the plan will already take into account the company's financial situation and the potential risks involved.

No Need Exists to Apply the Two Worst-Case Assumptions If