Several regulations limit dividend payments.All of the following limit dividend payments except:
A)Capital impairment restriction
B)Restrictive covenants
C)Net earnings restriction
D)Liability restriction

Question

Quizplus · Accepted Answer

Liability restriction is not a regulation that restricts dividend payments. Capital impairment restriction limits dividend payments when a company does not have enough capital to pay its debts. Restrictive covenants limit dividend payments by stipulating restrictions on how the company uses its funds. Net earnings restriction limits dividend payments by restricting the amount of profits a company can distribute as dividends. However, liability restriction does not relate to dividend payments.

Several Regulations Limit Dividend Payments